"Government to Ease Oil Price Burden for Farmers and Fishers... Additional KRW 79.1 Billion in Tax-Free Fuel Subsidies"

Cabinet Approves Related Budget on September 29

The government has decided to extend the period of fuel price-indexed subsidies for tax-free oil for agricultural and fisheries households until the end of the year to alleviate the increased management costs caused by high oil prices amid the prolonged Middle East conflict. To that end, an additional KRW 79.1 billion will be provided.

The government announced on September 29, 2026, that it has approved a reserve expenditure plan of KRW 79.1 billion during a cabinet meeting, to cover the necessary costs resulting from the extension of the fuel price-indexed subsidy period for agricultural and fisheries oil, which was originally scheduled to end in September this year but will now continue through the end of the year.

The Asia Business Daily DB

To mitigate the burden of sharply rising management costs for agricultural and fisheries households due to high oil prices, the government has already allocated KRW 118.8 billion in the first supplementary budget of 2026. Since March, the government has been temporarily providing fuel price-indexed subsidies to cover up to 70% of the amount exceeding the reference price for tax-free oil for agricultural and fisheries use, within the maximum payment limit. In May, the subsidy cap for tax-free diesel was increased by KRW 37.8 per liter, from KRW 138.4 to KRW 176.2.

Currently, the price of tax-free diesel stands at KRW 1,401 and tax-free kerosene at KRW 1,386, representing an increase of about 25% compared to the end of February. With high oil prices persisting, the government decided through its Chuseok livelihood stabilization measures on September 1, 2026, to extend the fuel price-indexed subsidy period for tax-free oil from the end of September to the end of December. Accordingly, an additional KRW 79.1 billion will be provided in the fourth quarter using the reserve fund allocated to respond to high oil prices.

The Ministry of Agriculture, Food and Rural Affairs, the Ministry of Oceans and Fisheries, and other relevant agencies plan to amend the project guidelines within this week to implement the extension of the subsidy period and adjust project funds, while thoroughly monitoring the execution status.

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