South Korea’s Ministry of Land, Infrastructure and Transport will extend a fuel subsidy for diesel by two months, through April, and increase the support rate to 70 percent, officials announced Monday.
The decision comes as rising international oil prices, fueled by geopolitical instability in the Middle East, are increasing costs for transportation and logistics companies. The government first introduced the diesel fuel price stabilization measure in April 2022 to alleviate the burden on these industries when fuel costs surge.
Under the program, a subsidy is provided when the price of diesel exceeds 1,700 won (approximately $1.30 USD) per liter. The subsidy covers a portion of the amount exceeding that benchmark. Previously, the subsidy covered 50 percent of the difference, but will now cover 70 percent. The maximum subsidy is capped at 183 won per liter.
The revised guidelines, which went into effect March 11, will also be applied retroactively to purchases made between March 1 and March 10. In other words businesses can claim the increased subsidy for fuel already purchased during that period.
The subsidy program benefits approximately 380,000 freight trucks, 16,000 buses operating on fixed routes, and taxis. According to the Ministry of Land, Infrastructure and Transport, a 25-ton truck operator using an average of 2,402 liters of diesel per month could see their monthly fuel costs reduced by up to 440,000 won (approximately $336 USD) as a result of the expanded support.
The government stated it will continue to monitor global oil price fluctuations and assess the need for further support measures. The ministry will also review the situation and consider additional assistance if necessary.
