S. Korea to Cut Tariffs on Oil Imports

S. Korea to Cut Tariffs on Oil Imports
(The Korea Times – Yonhap News)

South Korea's Finance Ministry said Tuesday that it will cut import tariffs on four oil-related products including gasoline as part of its efforts to ease mounting inflationary pressure on consumers and companies.

The Ministry of Strategy and Finance said it will reduce import tariffs for gasoline, kerosene, diesel and heavy oil products from the current 3% to 1%, starting April 1.

The tariff reduction will likely induce more market competition here, thereby pressuring four local operators, which dominate the nation's refinery industry, to cut oil product prices in the long term, a ministry official said.

The move is part of the government's intensifying efforts to tame inflation amid rising prices of crude oil and other commodities.

South Korea's consumer inflation rate reached 3.6% in February, breaching the central bank's target range of 2.5% to 3.5% for the third month in a row. The Lee Myung-bak government, which was inaugurated last month, has said that price stability is one of its most important tasks.

Meanwhile, the ministry said it will also reduce import tariffs on a total of 82 price-sensitive items including flour and corn in a bid to ease rising cost burdens for both consumers and companies.