Changes from July: Gov't to expand tax cuts and diesel subsidies to target soaring oil prices
Updated: 2022-07-01 17:13:21 KST
July kicked off, and with it, so did bigger tax cuts for oil.
The government on Friday expanded oil tax cuts from 30 to 37 percent.
That's going to lower fuel prices by a cent to four cents per liter.
37 percent is the highest the government can go in terms of cuts.
It's also extending the cut until the end of the year, from its original due date - the end of July.
By making this decision, the government is taking a hit of almost 7 billion U.S. dollars in tax revenue.
But the change is seen as necessary in order to ease soaring inflationary pressures.
Not all gas stations can trim down their prices right away though; some first have to sell gasoline marked with the pre-July prices.
"This gas station has lowered prices right on the day that the government expanded tax cuts.
As a result, it's seeing a busier day than usual.
But some drivers have left disappointed because they were unable to see a meaningful change in oil prices that have already been hiked up so much."
"It's good for gas stations because we see a rise in profit. And from a consumer standpoint, they can fill up for cheaper than before, so I think this change is good."
"Because I drive a lot for my job, the expensive gas prices are really taking a toll on our family's finances. I can't really feel the change in prices per liter."
"I thought that oil prices became expensive after they went above 2-thousand won. Even with the tax cuts, it's still above 2-thousand so it still feels really expensive."
So the government is doing more.
It's expanding diesel subsidies, targeting truckers who've taken the biggest hit from soaring prices.
From July, truck drivers can get diesel subsidies of up to 362 dollars per month, which is a rise from before.
Despite government efforts to provide some breathing room for the public, concerns still remain over rising prices - like utility rates.
The Korea Electric Power Corporation is raising energy prices, and the average household of four may see around 3 dollars extra in their monthly bill.
And with the hottest months coming up, people will be able to feel the extra cost in their utility bills.
Kim Yeon-seung, Arirang News