Seoul: South Korea’s top economic policymaker announced on Thursday that the government will extend its fuel tax cut for an additional two months, continuing through next February. This extension aims to alleviate the financial pressure on consumers as oil prices remain high.

According to Yonhap News Agency, the government will maintain a 15 percent tax reduction on gasoline and a 23 percent cut on diesel and liquefied petroleum gas. Finance Minister Choi Sang-mok emphasized during a radio interview that the extension is a response to high oil prices and is intended to reduce the financial load on low-income households.

The finance ministry highlighted that this decision is partly due to ongoing uncertainty in both global and domestic oil prices. Factors contributing to this uncertainty include tensions in the Middle East and concerns about rising fuel costs affecting consumers.

The updated measures will be implemented starting January 1 and will be effective until the end of February, as confirmed by the
ministry. South Korea initially introduced the fuel tax cut scheme in November 2021 and has since extended it multiple times, adjusting the reduction rates according to global energy market trends. This latest extension marks the 13th time the policy has been prolonged.

With South Korea’s heavy reliance on energy imports, rising global oil prices have increased inflationary pressures. The government’s decision to extend the tax cut is seen as a preemptive measure to counteract these economic challenges.