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🇰🇷 South Korea /Economy & Trade

LNG, LPG tariff rates to be 0% from second half of year; banana tariff benefits extended

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Named sources New plan
  • South Korea will apply a 0% tariff rate to LNG and LPG in the second half of the year to mitigate high energy prices.
  • The government will also extend tariff benefits for bananas and other agricultural products to ease cost burdens.
  • These measures aim to reduce public utility and transportation costs, influenced by global energy market fluctuations.

South Korea plans to implement a 0% tariff rate on Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG) starting in the second half of the year. This decision, announced by Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol, aims to alleviate the impact of high energy prices driven by global events, including the war between the United States and Israel against Iran.

The government will reduce the tariff rate for LNG, propane, and butane LPG, as well as crude oil for LPG production, from the previously planned 1-2% to 0% for the third and fourth quarters. Additionally, the excise tax on LNG for power generation will be reduced by 15% from July through the end of the year. The fuel tax cut for LPG and butane, initially set to expire in June, has been extended until July 31.

These measures are intended to lower public utility and transportation costs by reducing the price of energy commodities. The government estimates that approximately 1 trillion won (about $720 million) will be provided through tariff benefits, with the energy sector accounting for 40-50% of this amount. Choi Jae-young, Director of Tariff Policy at the Ministry of Economy and Finance, highlighted the significant allocation to energy.

In addition to energy, South Korea will extend tariff benefits to 22 agricultural items, including three types of fruits, 17 food ingredients, and two types of feed ingredients. Tariff rates for bananas, pineapples, and mangoes, which were set to expire at the end of June, will be extended until August 15. Nine new items, such as grape concentrate and palm oil, will also receive tariff benefits until the end of the year. The government plans to strengthen distribution oversight for 17 food ingredients designated as priority items to ensure the tariff reduction benefits consumers.

1 trillion won (about $720 million) will be provided through tariff benefits, with the energy sector accounting for 40-50% of this amount

— Choi Jae-youngDirector of Tariff Policy at the Ministry of Economy and Finance, on the scale of tariff support
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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