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New Govt. Measures Insufficient to Ease Public Burden of High Oil Prices

New Govt. Measures Insufficient to Ease Public Burden of High Oil Prices

Posted November. 14, 2007 08:15,   


Faced with the steeply rising oil prices, the government said it would temporarily reduce the special consumption tax on heating fuels by 30% for the next three moths. Gas and diesel buyers, however, will not enjoy a similar discount.

Some presidential contenders have promised to cut taxes on oil products, while the administration has consistently insisted on the status quo. Thus, the decision is likely to lead to a standoff between the two sides.

At a meeting with the ruling United New Democratic Party representatives, the Ministry of Finance and Economy announced a series of measures against the rising oil prices yesterday.

According to the announcement, the administration will waive 30% of the current special consumption tax on heating fuels, such as kerosene, LPG propane and butane, and heating LNG, to relieve the oil price burden on citizens.

During the three-month period, the price of kerosene will be marked down from 90 won/liter to 63 won, LPG propane and butane will be from 40 won/liter to 28 won, and heating LNG will be from 60 won/kg to 42 won.

Furthermore, the government will raise the “heating allowance” to each of the social security beneficiaries from 70,000 won per month to 85,000 won next year.

Besides the increase, a social security beneficiary will receive an additional 70,000 won during the three winter months, and enjoy a 20% discount off his or her nighttime electricity bill.

The government will also allow carmakers to manufacture LPG compact cars this year, which means LPG-powered cars will hit dealer showrooms next year.

More and more citizens had called for a reduction of the unreasonably high taxes on oil products, as oil prices have climbed near $100/barrel.

South Koreans, however, seem unsatisfied with the new measures. South Koreans criticize the government for its refusal to lower the taxes on gas and diesel, and the relatively minor reductions proposed yesterday.