South Korea’s Ministry of Finance will extend the country’s consumption tax cut scheme on fuel until 31 August 2023. The measure, which is originally set to expire at the end of April, consists in a 25% cut on the consumption of gasoline, and a 37% cut on the consumption of diesel and liquefied petroleum gas (LPG) butane. The updated measure will be implemented on 1 May 2023 after being approved by South Korea’s Cabinet.
The South Korean government first cut its tax on fuel in November 2021 to help its economy recover after the COVID-19 pandemic, and has been extending it since then, notably due to the consequences of the war in Ukraine.
South Korea is currently experiencing serious inflation, as consumer prices, rose 4.2% in March 2023 and 4.8% in February 2023 (year-on-year). The average gasoline price at South Korean gas stations was KRW1,657/l (US$1.26/l) on 17 April, up by 3.7% from a month earlier. Diesel cost KRW1,545.8/l (US$1.17/l) on 18 April (+0.2% from a month earlier).
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