37% reduction in fuel tax from July… Minimizing electricity and gas rate hikes, concerns about high inflation in the 6% range – Cheonji Ilbo

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Choo Kyung-ho, Deputy Prime Minister of Economy and Minister of Strategy and Finance, presides over the ‘1st Emergency Economic Ministers’ Meeting’ held at the Government Complex Seoul in Jongno-gu, Seoul on the afternoon of the 19th. (Provided by: Ministry of Strategy and Finance) ⓒCheonji Ilbo 2022.6.19

Raising prices can affect prices

The remaining public charges will be frozen

[천지일보=김현진 기자] The government is expanding the range of fuel tax cuts from July to the end of the year to 37%, the maximum level possible under the law, in order to respond to the rapidly soaring high and high oil prices. It was decided to minimize the increase in electricity and gas rates and to continue freezing public rates such as railroad, postal, water and sewerage. However, there are concerns that if electricity and gas rates are raised, the consumer price inflation rate, which recorded 5.4% last month, could exceed 6%.

The government held an emergency economy ministers meeting on the 19th at the government complex in Seoul, presided over by Choo Kyung-ho, deputy prime minister for economy and Minister of Strategy and Finance, and made this decision.

First, it was decided to induce a reduction in the sale price of petroleum products by expanding the range of oil tax cuts to 37%, the maximum allowed by law, from July to the end of the year. Currently, the government is temporarily implementing a 30% cut in gasoline, diesel, and LPG butane fuel taxes, the largest ever, but decided to increase the range of fuel tax cuts further to 37%.

Accordingly, the effect of additional fuel tax cuts is 37 won per liter for gasoline, 38 won per liter for diesel, and 12 won per liter for LPG butane.

However, as international oil prices are soaring to close to $120 per barrel, domestic gasoline and diesel prices are expected to continue to rise for the time being. comes out Even if the additional fuel tax cut is reflected in the price as much as possible, if the price of oil rises again as much as the price has gone down, the sensitivity may decrease.

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As a result, some are calling for a further increase in the limit of the fuel tax cut, even if the law is amended if oil prices continue to soar.

In addition, the government will lower the standard unit price for subsidies linked to diesel oil prices, which is provided to people making a living with diesel vehicles such as trucks and taxis, from 1,750 won per liter (L) to 1,700 won. The diesel oil price subsidy is paid in a way that the government subsidizes half of the price of diesel that exceeds the standard price.

The average price of diesel has soared to 2,100 won per liter. When the standard unit price is 1,750 won per L, the diesel subsidy is about 175 won per liter.

By applying quota tariffs on domestic jet fuel, the current import tariff of 3% is reduced to 0%, thereby easing the pressure to increase domestic fares.

Choo Kyung-ho, Deputy Prime Minister of Economy and Minister of Strategy and Finance, presides over the '1st Emergency Economic Ministers' Meeting' held at the Government Complex Seoul in Jongno-gu, Seoul on the afternoon of the 19th.  (Provided by: Ministry of Strategy and Finance) ⓒCheonji Ilbo 2022.6.19
Choo Kyung-ho, Deputy Prime Minister of Economy and Minister of Strategy and Finance, presides over the ‘1st Emergency Economic Ministers’ Meeting’ held at the Government Complex Seoul in Jongno-gu, Seoul on the afternoon of the 19th. (Provided by: Ministry of Strategy and Finance) ⓒCheonji Ilbo 2022.6.19

Electricity and gas rates, which are increasing in production cost burden, decided to minimize the increase through self-rescue efforts. This is interpreted as meaning that the government will accept at least some part of the demand for electricity and gas rate hikes from Korea Electric Power Corporation and Korea Gas Corporation.

Earlier, on the 16th, KEPCO requested the government to raise the electricity rate by 3 won per kWh (kilowatt hour) in the third quarter, and KOGAS will also increase the raw material cost settlement price for civil (housing and general) gas rates by megajoule (MJ gas use) starting next month. The key was whether or not the Ministry of Strategy and Finance would accept this, as it showed that it would raise the price by 0.67 won to 1.90 won per calorie unit).

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The government believes that an increase in electricity and gas rates is inevitable, and instead of minimizing the increase, it will freeze other utility rates. Public charges such as road tolls, railroad rates, postal rates, metropolitan water service charges, and automobile inspection fees, as well as local rates such as water and sewage rates, garbage bag prices, city bus rates, taxi rates, and train rates will be frozen as much as possible.

In the second half of the year, the credit card income deduction rate for public transportation such as subways, city/intercity buses, and trains will be doubled from 40% and applied to 80%. Credit card income deduction is a system that provides deduction benefits for card usage (including cash and debit cards) exceeding 25% of total salary.

In order to stabilize the typical meal price, the company plans to monitor market trends on a daily basis, focusing on items with rising prices such as livestock products and essential food, and to stabilize the market by responding in a timely manner through supply and demand management such as release of stockpiles and emergency imports and price discounts.

The quota tariff volume for pork of 50,000 tons will be imported promptly, and if necessary, the amount will be increased by an additional 50,000 tons. Pork imported in this way is also under consideration to hold a discount event in cooperation with large marts.

In addition, it is planning to support a 5 billion won discount coupon business within this month.

Deputy Prime Minister Choo said, “Recently, difficulties in people’s livelihood are aggravating due to the increase in internal and external uncertainties, and a complex crisis situation such as high inflation and slowing growth will continue for a considerable period of time. I will not,” he said.

Choo Kyung-ho, Deputy Prime Minister of Economy and Minister of Strategy and Finance, presides over the '1st Emergency Economic Ministers' Meeting' held at the Government Complex Seoul in Jongno-gu, Seoul on the afternoon of the 19th.  (Provided by: Ministry of Strategy and Finance) ⓒCheonji Ilbo 2022.6.19
Choo Kyung-ho, Deputy Prime Minister of Economy and Minister of Strategy and Finance, presides over the ‘1st Emergency Economic Ministers’ Meeting’ held at the Government Complex Seoul in Jongno-gu, Seoul on the afternoon of the 19th. (Provided by: Ministry of Strategy and Finance) ⓒCheonji Ilbo 2022.6.19

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