Fuel Tax Cut Extended for Two More Months Until November Amid Ongoing Middle East Instability

The government will extend the fuel tax reduction, which was originally scheduled to end at the end of this month, by an additional two months. This decision aims to ease the public's burden of fuel costs amid ongoing instability in the Middle East and growing concerns over oil price volatility.

According to the Ministry of Economy and Finance's announcement on the "Fuel Tax Operation Plan after October" released on the 18th, the government has decided to extend the fuel tax reduction, which was set to expire on September 30, until November 30.

On the 3rd, international oil prices surged sharply due to strong remarks by U.S. President Donald Trump, and a notice displaying gasoline and diesel prices was placed at a gas station in Yongsan-gu, Seoul. April 3, 2026. Photo by Dongju Yoon

With this measure, the current fuel tax reduction rates will be maintained. Gasoline will continue to be subject to a 15% reduction, resulting in a continued discount of 122 won per liter. Diesel will remain at a 25% reduction, with a discount of 145 won per liter, and LPG butane will also keep the 25% reduction, providing a discount of 51 won per liter.

The government plans to alleviate the cost burden for the public by maintaining the relatively higher 25% reduction rate for diesel, essential for industry and logistics, and for LPG butane, commonly used as fuel for small trucks and by low-income individuals. This measure is designed not only to reduce the public's fuel expenses amid ongoing uncertainty in the Middle East, but also to ensure capacity to respond to potential increases in oil price volatility in the future.

This temporary tax reduction, first introduced in November 2021 in response to a surge in oil prices, will reach its fifth year with this extension. The reduction will be implemented through amendments to the Enforcement Decree of the Transportation, Energy, and Environment Tax Act and the Enforcement Decree of the Individual Consumption Tax Act, which will be submitted to the Cabinet meeting.

This content was produced with the assistance of AI translation services.