Home Business Hong Nam-ki “fuel tax cut, decided next week”… How much will gasoline prices fall?

Hong Nam-ki “fuel tax cut, decided next week”… How much will gasoline prices fall?

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The government has decided to announce whether the fuel tax will be lowered as early as next week. This is in response to the criticism that international oil prices rose to the highest level in seven years, increasing the burden on the common people. It also decided to consider lowering tariffs on liquefied natural gas (LNG) quota.

Deputy Prime Minister and Minister of Strategy and Finance Hong Nam-ki said, “We are considering lowering the fuel tax internally.”

Deputy Prime Minister Hong said, “The high oil price is not going to drop anytime soon.” He added, “We have already considered lowering the fuel tax, but if the content is released before it is finalized, there may be confusion, so we reviewed it internally,” he added.

From November 2018 to May 2019, when the price of oil was soaring, the government reduced the four fuel taxes imposed on gasoline, diesel, liquefied petroleum gas (LPG) and Bhutan by 15%: transportation, energy, and environmental taxes, individual consumption tax, driving tax, and education tax. lowered From May to the end of August 2019, the fuel tax cut was lowered to 7%, and then the fuel tax cut was abolished from September. At that time, after the fuel tax was cut by 15%, the price of gasoline was lowered by 123 won per liter and diesel by 87 won per liter. The reason the government pulled out the fuel tax cut card is that the rise in international oil prices is not slowing down. On the 19th (local time) on the New York Mercantile Exchange in the United States, West Texas Intermediate (WTI) for November contract finished trading at $82.96 per barrel, up 0.63% ($0.52) from the previous day. This is the highest number since October 2014. The government also decided to consider lowering tariffs on LNG quotas. Minister of Trade, Industry and Energy Moon Seung-wook said in a general audit of the Small and Medium Venture Business Committee on the same day, “We are discussing with relevant ministries, such as lowering oil tax and lowering LNG quota tariffs.” The Ministry of Trade, Industry and Energy recently requested the Ministry of Strategy and Finance to temporarily lower the tariff quota on LNG by up to 0%.

The quota tariff is a system that applies a different tax rate than the existing tariff up to a certain quota of imported goods. According to the Korea Gas Corporation, a basic tariff of 3% is applied to imports of LNG, and a tariff of 2% is applied during the winter season (from October of every year to March of the following year). If the quota tariffs are lowered, natural gas can be imported at a lower tax rate up to a certain amount. This could have the effect of increasing domestic supply of natural gas and stabilizing prices. According to the Ministry of Trade, Industry and Energy, the spot price of natural gas in Northeast Asia (JKM) reached an all-time high of $56.3 per million BTU (about 66,000 won) as of the 6th.

Sejong = Reporter Song Choong-hyun [email protected]

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