SEOUL, September 18 (AJP) — South Korea will extend temporary fuel tax cuts through November and lower pump prices at 226 highway gas stations during Chuseok as authorities grapple with a renewed spike in energy costs from the widening Gulf crisis, the government said Friday.
The current tax reductions of 15 percent for gasoline and 25 percent each for diesel and liquefied petroleum gas butane will remain in place through Nov. 30, two months beyond their scheduled expiry, according to the Ministry of Finance and Economy (MOFE).
"The fuel tax cuts scheduled to expire at the end of this month will be extended by two months to ease the public's fuel-cost burden," Deputy Prime Minister and Finance Minister Koo Yun-cheol said at an emergency economic meeting.
The government said the existing reduction rates were maintained to ease household costs while preserving room to respond to further oil-price volatility amid continued instability in the Middle East.
The cuts reduce taxes from pre-discount levels by 122 won per liter for gasoline, 145 won for diesel and 51 won for LPG butane.
Diesel and butane will continue to receive the larger 25 percent reductions because of their widespread use in industrial and logistics operations and small commercial trucks, the ministry said.
Fuel prices at 226 Korea Expressway Corp.-managed highway gas stations will be lowered by 100 won (about $0.07) per liter from Sept. 24 to 27 from Sept. 17 levels. Daytime electric-vehicle charging fees will also be discounted during the Chuseok holiday, when solar and other renewable-power supplies are relatively abundant.
The government will announce its 10th round of petroleum-product price ceilings at 6 p.m. Friday after reviewing international oil prices and the burden on consumers, with the new ceilings taking effect at midnight Saturday.
Global oil prices rose sharply again in September amid renewed uncertainty surrounding the Middle East conflict, with Brent crude climbing to $105.80 per barrel on Sept. 16 from $90.10 on July 31 and West Texas Intermediate rising to $102.40 from $84.70 over the same period.
Brent stood at $90.50 at the end of August before rising to $104.60 on Sept. 11, while WTI climbed from $85.80 to $100.10 over the same period.
Energy supplies are not expected to face major disruptions for the time being as the government pursues diplomatic efforts, diversifies crude-import sources and uses strategic petroleum reserve swaps, Koo said.
He added that the government and domestic refiners will operate a joint response team to monitor crude supplies daily and take additional measures if needed.
AJP TAKEAWAYS
- South Korea will extend fuel tax cuts through Nov. 30, maintaining a 15 percent reduction for gasoline and 25 percent cuts for diesel and LPG butane.
- Fuel prices at 226 highway gas stations will be lowered by 100 won per liter during the Sept. 24-27 Chuseok holiday, while daytime EV charging fees will also be discounted.
- Brent crude rose above $105 per barrel in September as Middle East uncertainty intensified, prompting the government to prepare new petroleum-product price ceilings and maintain daily monitoring of crude supplies.
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