South Korea will extend a tariff reduction on liquefied natural gas imports for another three months to help ease pressure on consumers during the winter when fuel demand peaks.
Natural gas tariffs will remain at zero until March 31, 2023, and taxes on liquefied petroleum gas will be cut to zero from 2% during the same period, the Ministry of Economy and Finance said in a statement Friday. The LNG tariff was lowered to zero in November 2021.
The move comes as soaring fuel prices are boosting energy costs for South Korean industries and households. North Asia LNG spot prices are currently about triple the the 10-year average through 2020.
South Korea’s inflation reached the highest level in 24 years in the July to September period, and remains elevated this quarter following the rally in commodity prices, and wider supply risks from Russia’s war with Ukraine. Consumer prices have become a key consideration for the Bank of Korea as it mulls when to lift interest rates.
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