Seoul, June 18 (IANS) South Korea plans to apply zero tariff rates on liquefied natural gas (LNG) and liquefied petroleum gas (LPG) within quotas in the second half of 2026 as the country seeks to tame inflation amid lingering global energy price volatility, the finance ministry said on Thursday.

The Ministry of Finance and Economy said tariff rates on LNG, LPG and crude oil used for the production of LPG will be lowered to zero in the second half, noting the measure is expected to help stabilise consumer prices by lowering utility and transportation costs.

The government earlier planned to lower tariff rates on LNG to 2 percent in the third quarter and 1 percent in the fourth quarter while dropping those on LPG and crude used for LPG production to 1 percent in the second half.

“We conduct commissioned research every year on whether the tariff-rate quota system puts downward pressure on consumer prices, and the findings consistently show that it has had such an effect in the energy sector,” a ministry official said.

South Korea’s consumer prices rose 3.1 percent in May from a year earlier amid global energy price volatility, marking the fastest growth in 26 months after increasing at the same pace in March 2024.

The tariff-rate quota system allows certain volumes of imports to benefit from lower tariff rates within a specified limit.

“It is expected to take some time for global energy production and transportation infrastructure, as well as logistics supply chains, to be fully normalised,” Finance Minister Koo Yun-cheol said during a meeting with related ministries on consumer prices.

“The aftermath of higher raw material costs still remains, and uncertainties have not yet eased significantly,” Koo said, noting the government intends to take all available measures to stabilise consumer prices.

South Korea also plans to apply the tariff-rate quota system to nine additional agricultural products, including grape concentrate and juice products, along with two types of animal feed, through the end of this year.

Tariff cuts on bananas, pineapples and mangoes currently in place will remain in effect through mid-August, taking into account the harvesting season for domestic fruits, such as apples and pears. The new policy will take effect July 1 following Cabinet approval.

—IANS

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