South Korea to Extend Fuel Tax Cuts Amid Middle East Conflict
Seoul, March 26 – South Korea will significantly expand its temporary fuel tax cut to alleviate financial pressures on consumers due to the ongoing situation in the Middle East, the finance ministry announced Thursday.The current tax reductions – 7 percent on gasoline and 10 percent on diesel – will be increased to 15 percent and 25 percent, respectively, according to Yonhap news agency. The measure, initially slated to expire in April, will now remain in effect through the end of May.
As a result, fuel taxes per liter, including value-added tax, will decrease by 65 won to 698 won for gasoline and by 87 won to 436 won for diesel. The decision aims to ease the burden of rising oil prices and support small and medium-sized businesses, alongside vulnerable households impacted by the prolonged conflict.
South Korea first implemented the fuel tax cut in November 2021 in response to escalating energy prices. The government has subsequently extended the measure, adjusting the rates to align with fluctuations in the global energy market.
Low-Cost Carriers Reduce International Flights
Meanwhile, South Korea’s low-cost carriers (LCCs) are responding to surging fuel costs by curtailing international flights. Air Premia Co. plans to suspend 10 flights on its Incheon-San Francisco and Incheon-New York routes in May. The company previously canceled 26 flights on the Incheon-Los Angeles route and six on the Incheon-Honolulu route between April 20 and May 31.
Eastar Jet Co. intends to suspend 50 flights on the Incheon-Phu Quoc route from May 5 to May 31, citing limited local refueling conditions in Vietnam. Air Busan Co. and Aero K Airlines Co. have already reduced flights on select international routes starting in April.
Industry sources indicate that the country’s three largest LCCs – Jeju Air Co., T’way Air Co. and Jin Air Co. – are also considering cuts to services on certain Southeast Asian routes.
Jet fuel prices in Asia and Oceania rose 16.6 percent to US$204.95 per barrel in the week of March 13-20, compared with the previous week, according to the International Air Transport Association.
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