South Korea to scrap LNG, LPG tariffs in bid to ease inflation pressures

South Korea will introduce zero tariffs on imports of liquefied natural gas (LNG) and liquefied petroleum gas (LPG) under a quota system in the second half of 2026, as the government seeks to curb inflation and shield consumers from volatile global energy prices.

The Ministry of Economy and Finance said on June 18 that tariff rates on LNG, LPG and crude oil used in LPG production will be reduced to zero from July 1, replacing earlier plans for more gradual reductions, Caliber.Az reports, citing South Korean media.

Officials said the measure is expected to help stabilise consumer prices by lowering energy-related costs, including utility bills and transportation expenses.

Under the previous plan, tariffs on LNG were due to fall to 2% in the third quarter and 1% in the fourth quarter, while duties on LPG and crude oil used for LPG production were to be cut to 1% in the second half of the year.

“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.

The move comes as South Korea faces renewed inflationary pressures linked to fluctuations in global energy markets. Consumer prices rose 3.1% in May from a year earlier, marking the fastest pace of inflation in 26 months and matching the rate recorded in March 2024.

The tariff-rate quota system allows designated volumes of imports to enter the country at reduced tariff rates within a specified limit.

Beyond energy products, the government plans to extend the scheme to nine additional agricultural items, including grape concentrate and juice products, as well as two types of animal feed, through the end of 2026.

Meanwhile, existing tariff reductions on bananas, pineapples and mangoes will remain in place until mid-August, taking into account the harvest season for domestic fruits such as apples and pears.

The policy is scheduled to take effect on July 1 following approval by the Cabinet.

By Aghakazim Guliyev