The South Korean government announced on Thursday it will expand tax cuts on liquefied petroleum gas butane products from 10 percent to 25 percent starting next month through June. The measure aims to mitigate the domestic impact of international price surges due to the Middle Eastern crisis. The Fair Trade Commission plans stronger penalties for repeated collusion cases.
The Ministry of Finance and Economy made the decision as the impact of international LPG price hikes, driven by the Middle Eastern crisis, is expected domestically from May. International butane prices jumped nearly 50 percent to an average of $800 per ton this month from $540 per ton in March. Butane users are mostly low-income groups.
Late last month, the government more than doubled tax cuts on gasoline from 7 percent to 15 percent and on diesel from 10 percent to 25 percent through the end of May. An intergovernmental inspection team nabbed 99 cases of petroleum business law violations, including false reporting and hoarding, at more than 5,700 gas stations nationwide.
Consumer price inflation was a modest 2.2 percent in March but is expected to reach the mid-2 percent range or higher in April due to rising fuel prices, the ministry said. It will continue measures to stabilize supplies of key industrial materials like naphtha and urea to minimize the crisis's impact on domestic industries.
The Fair Trade Commission said it will push stronger punitive measures against companies repeatedly involved in collusion, including revocation of registrations and licenses, and business suspensions, especially in industries like construction and real estate requiring approvals. It is reviewing systems to order dismissal or suspension of executives involved, litigation reforms for easier victim compensation, and 100 percent surcharges for repeat offenders within the previous 10 years, up from the current 10 to 80 percent over five years.
