South Korea plans to expand fuel tax cuts amid soaring prices

SEOUL: South Korea’s government plans to extend fuel tax cuts, as part of efforts to ease inflationary pressure that has built up amid soaring energy prices, officials said on Saturday officials from the Ministry of Finance.

The government plans to extend fuel tax cuts from the current 30 percent to a legal cap of 37 percent, officials quoted by the Yonhap news agency as saying.

Finance Minister Choo Kyung-ho plans to chair an emergency meeting with economy-related ministers on Sunday when the expansion of fuel tax cuts is expected to be confirmed, they said.

Inflationary pressures quickly built up amid soaring oil and commodity prices, caused by Russia’s invasion of Ukraine and the recovery in demand.

Consumer prices in South Korea jumped 5.4% year-on-year in May, the fastest rise in nearly 14 years and a recovery from a 4.8% peak in April.

The average retail price for diesel rose above 2,100 won ($1.62) on Friday, while that for gasoline stood at 2,098.45 won.

The price of gasoline broke through the 2,000 won mark on March 15, the first time in more than nine years.

The continued upward trend in fuel prices is attributable to the shortage of petroleum product supplies triggered by Russia’s invasion of Ukraine and subsequent international sanctions against Moscow, a major energy exporter in the world.

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