South Korea is set to introduce zero tariff rates on liquefied natural gas (LNG) and liquefied petroleum gas (LPG) within quotas by the second half of 2026. The move aims to address inflation concerns amidst ongoing fluctuations in global energy prices, as announced by the Ministry of Finance and Economy. Lowering tariff rates on LNG, LPG, and crude oil used for LPG production to zero is expected to reduce utility and transportation costs, thereby aiding in stabilizing consumer prices.
The government’s initial plan was to decrease tariff rates on LNG to 2 percent in the third quarter and 1 percent in the fourth quarter, while also reducing rates on LPG and crude oil for LPG production to 1 percent in the second half. A ministry official highlighted that annual research consistently shows the tariff-rate quota system’s positive impact on lowering consumer prices in the energy sector.
Amid a 3.1 percent year-on-year increase in consumer prices in May, South Korea is emphasizing the need for measures to mitigate the impact of global energy price volatility. Finance Minister Koo Yun-cheol stressed the importance of addressing the challenges posed by higher raw material costs and ongoing uncertainties, indicating the government’s commitment to implementing necessary actions to stabilize consumer prices.
In addition to the energy sector, South Korea plans to extend the tariff-rate quota system to include nine more agricultural products and two types of animal feed until the end of the year. Notably, tariff reductions on bananas, pineapples, and mangoes will continue until mid-August, aligning with the domestic fruit harvesting season. The new policy adjustments are scheduled to come into effect on July 1, pending Cabinet approval.
