The South Korean government has been considering expanding fuel tax cuts, as part of efforts to ease inflation pressure that has been building up amid surging energy prices, Finance Ministry officials said on Saturday.
The government has been mulling expanding fuel tax cuts from the current 30 per cent to a legal cap of 37 per cent, Yonhap News Agency quoted the officials as saying.
Finance Minister Choo Kyung-ho plans to preside over an emergency meeting with economy-related ministers on Sunday, when the expansion of fuel tax cuts is likely to be confirmed, they said.
Inflationary pressure has rapidly built up amid soaring oil and commodity prices, caused by Russia’s invasion of Ukraine and the recovery in demand.
South Korea’s consumer prices jumped 5.4 per cent on-year in May, the fastest rise in almost 14 years and a pickup from a 4.8 per cent spike in April.
The average retail price of diesel surpassed 2,100 won ($1.62) on Friday, while that of gasoline stood at 2,098.45 won.
The price of gasoline breached the 2,000 won mark on March 15, the first time in more than nine years.
The continued uptrend in fuel prices is attributable to the supply shortage of petroleum products triggered by Russia’s invasion of Ukraine and subsequent international sanctions on Moscow, a major energy exporter in the world.