March 8 (Asia Today) — Gasoline prices in South Korea are approaching 2,000 won per liter as rising global oil prices linked to tensions in the Middle East push fuel costs higher, prompting debate over additional government tax cuts.

According to the oil price monitoring system operated by the Korea National Oil Corporation, the nationwide average gasoline price stood at 1,889.40 won ($1.41) per liter as of Friday.

In Seoul, the average price reached 1,941.71 won ($1.45) per liter, nearing the psychologically significant 2,000 won ($1.49) level and increasing pressure on consumers.

Fuel prices typically reflect international oil market changes with a delay of about two to three weeks. However, the recent sharp increase has raised expectations that the government may expand existing fuel tax reductions.

The government has already extended temporary tax cuts through the end of April. Gasoline currently benefits from a 7% fuel tax reduction, while diesel and liquefied petroleum gas butane receive 10% reductions.

Fuel taxes are one of the government’s most direct tools to ease inflation, as adjustments can quickly influence consumer prices.

South Korea previously expanded fuel tax cuts during earlier energy price surges. In 2022, when oil prices spiked following the Russia-Ukraine war, the government increased the reduction rate from about 30% to the legal maximum of 37%.

Officials are reportedly reviewing whether additional tax reductions are needed. Because fuel tax rates are set by enforcement decree, the government can implement changes relatively quickly after approval at a Cabinet meeting.

Bae Jun-young of the conservative People Power Party said fuel tax cuts should be expanded to provide meaningful relief for consumers.

“If tensions in the Middle East persist, the government should also consider raising the ceiling on the flexible fuel tax rate,” Bae said.

— Reported by Asia Today; translated by UPI

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