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Fuel tax reduction drives down oil prices on 1st day

November 6, 2018

SEOUL, Nov. 6 (Yonhap) — The government’s tax cut on fuel products drove down the cost of fuel on the first day it took effect, an oil prices information service said Tuesday.

The Ministry of Strategy and Finance said last week it would temporarily lower fuel taxes by 15 percent for six months, reducing the tax burden on people by 2 trillion won (US$1.78 billion).

As of 7:40 p.m., gasoline prices traded at an average of 1,661.94 won per liter, down 28.36 won from a day earlier. Diesel prices shed 19.25 won to 1,476.51 won and liquefied natural gas prices declined 21.44 won to 912.89 won during the same period, showed Opinet, an oil prices information provider operated by the state-run Korea National Oil Corp.

Oil prices are a little above US$80 per barrel, and domestic fuel prices have recently risen sharply, raising concerns that the spike in costs may put a damper on Asia’s fourth-largest economy.

The government annually collects about 26 trillion won in fuel taxes.

In this photo taken Nov. 6, 2018, a car enters a gas station in Daejeon, 160 kilometers southwest of Seoul. (Yonhap)

In this photo taken Nov. 6, 2018, a car enters a gas station in Daejeon, 160 kilometers southwest of Seoul. (Yonhap)