Government to Reintroduce '100% Refund' of Non-Middle Eastern Crude Oil Import Levies...Effective Through December

Significant Easing of Crude Oil Import Levy Refund Limits and Requirements
Measure Reintroduced Amid Heightened Middle East Instability, Following April–June Enforcement

As geopolitical uncertainty stemming from the Middle Eastern war continues for an extended period, the government has decided to reintroduce expanded refunds for crude oil import levies on oil sourced from non-Middle Eastern regions.

114,000-ton crude oil tanker. The Asia Business Daily DB.

According to the Ministry of Economy and Planning, Deputy Minister Yongbeom Cho convened the "6th Levy Management Deliberation Committee of 2026" in written form and announced on September 23 that the committee had approved the "Temporary Easing of Refund Requirements and Expansion of Refund Limits for Diversified Crude Oil Imports." The measure will be in effect for four months, from September through December.

The core of this policy is that the government will compensate refiners for transportation costs previously borne when importing crude oil from regions outside the Middle East. The oil import levy is a statutory charge imposed and collected from importers of crude oil or petroleum products, amounting to 16 won per liter. Previously, only about 25% of the excess shipping costs incurred over Middle Eastern imports could be refunded under the existing scheme. However, until December, refiners can receive a full refund of up to 100% of the excess shipping costs, as long as it does not exceed the cap of 16 won per liter. Additionally, previous refund requirements—such as the minimum import volume (over 4 million barrels) and long-term contract conditions (contracts of at least one year)—will be excluded. This allows refiners to pursue flexible import diversification through short-term spot transactions or small-scale contracts.

Earlier, the government implemented the same set of measures from April to June, immediately after the outbreak of the Middle Eastern war, to support the industry’s efforts to diversify crude oil sources. At that time, the expected total refund was 127.5 billion won. However, as the Middle East conflict has shifted into a prolonged standoff rather than a short-lived event, the government decided to tighten support for the industry in order to relieve the cost burden on refiners and stabilize domestic petroleum prices.

The Ministry stated, "As domestic refiners’ burden of transportation costs for diversified crude oil imports is reduced, we expect it to serve as an effective tool for encouraging the diversification of crude oil import sources.” The Ministry continued, “The government will continue to operate the levy system in a manner that contributes to revitalizing the national economy, comprehensively considering economic conditions and the business environment."

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