Deputy Prime Minister and Finance Minister Koo Yun-cheol chaired the 11th ministerial task force meeting on consumer price stabilization at the Government Complex Seoul on Thursday.
The government said geopolitical risks had eased somewhat after U.S. President Donald Trump signed a memorandum of understanding aimed at ending the war with Iran, helping push global oil prices lower.
But officials warned that global energy production, transport infrastructure and logistics networks may take time to fully normalize, leaving pressure on consumer prices intact.
“Just because the waves in front of us have subsided does not mean the reefs under the surface are gone,” Koo said.
He said the government would use all available tools to stabilize prices and ease the burden on households.
Petroleum product prices rose 24.2 percent from a year earlier in May, following gains of 21.9 percent in April and 9.9 percent in March.
Consumer inflation also accelerated to 3.1 percent in May from 2.6 percent in April and 2.2 percent in March.
As part of the package, diesel subsidies for freight and passenger transport operators, which were set to expire at the end of June, will be extended through the end of September.
The subsidy will also be expanded to chartered buses. The program covers 70 percent of the portion of diesel prices above 1,700 won per liter, with support capped at 280 won per liter.
The government will also expand tax and tariff relief for energy products.
From the second half of this year, quota tariffs on LNG, LPG and crude oil used to produce LPG will be lowered to zero.
The government will cut the individual consumption tax on LNG used for power generation by 15 percent from July through December.
A 25 percent flexible fuel tax cut on butane, widely used as a household and small-business fuel, will be extended by one month through the end of July.
The government will also expand tariff support for food and agricultural inputs.
Tariff relief will be extended for three imported fruits — bananas, pineapples and mangoes — and 10 food ingredient items including processed egg products.
Nine additional items, including seven food ingredients and two feed ingredients, will be newly covered by quota tariffs.
Including 27 existing items, a total of 49 products will receive support.
The government said it will designate 17 food ingredients as closely monitored items to make sure tariff cuts are passed on to consumers through lower prices.
It will also strengthen inspections across import and distribution channels.
The government plans to reinforce its use of artificial intelligence to monitor prices more closely.
AI will be used to collect and analyze prices of key food and daily necessities across production and distribution stages, while improving models used to forecast supply and price movements.
The government plans to build an “Affordable Consumption App” in the second half of the year to provide real-time price and discount information by retailer.
The app is aimed at helping consumers compare prices more easily and make more informed purchasing decisions.
The government will also work with local governments to keep public utility charges broadly frozen in the second half of the year.
A broader package to stabilize consumer prices and reduce the burden on low-income and vulnerable groups will be announced soon, officials said.
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