Sun, June 30, 2024 at 07:39

• 

  Kang-hoon

  • Hello, Annie.

  • Today, I have some important news regarding fuel taxes.

  • Starting tomorrow, the fuel tax cuts will be reduced from 25 to 20 percent for gasoline and from 37 to 30 percent for diesel.

  • 
• Annie

  • Oh, that's interesting.😊 So, how much will the prices increase?

  
• 

  Kang-hoon

  • The price of gasoline will increase by 41 won per liter, and diesel will go up by 38 won per liter.

• Annie

  • Wow, that sounds like a significant increase.

  • How will this affect the average driver?

  
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• 

  Kang-hoon

  • For someone driving 40 kilometers per day in a gasoline vehicle with a fuel efficiency of 10 kilometers per liter, the monthly fuel bill will increase by 4,920 won.

  • For a diesel vehicle with the same efficiency, the increase will be 4,560 won.

• Annie

  • I see.

  • What reasons did the government give for reducing the fuel tax cuts?

  
• 

  Kang-hoon

  • The Ministry of Strategy and Finance cited the recent decline in international oil prices, the stabilization of consumer prices, and the impact on the country's finances as the main reasons.

• Annie

  • Hmm, that makes sense.

  • But when did these fuel tax cuts originally start?

  
• 

  Kang-hoon

  • The government began implementing these temporary reductions in November 2021, when international oil prices surged.

  • They have extended the deadline multiple times since then.

• Annie

  • And how long will the current cuts last?

  
• 

  Kang-hoon

  • The current cuts are scheduled to run through the end of August.

• Annie

  • Got it.

  • So, what do you think will be the broader impact on the market?

  
• 

  Kang-hoon

  • In the short term, this is likely to be a negative development.

  • Higher fuel costs will increase transportation and production costs, which could lead to higher prices for goods and services.

  • 
• Annie

  • That doesn't sound good.😟 Do you think this will affect consumer behavior?

  
• 

  Kang-hoon

  • Yes, higher fuel prices often lead to reduced consumer spending in other areas.

  • People may cut back on non-essential purchases to offset the increased cost of fuel.

• Annie

  • What about the impact on businesses?

  
• 

  Kang-hoon

  • Businesses, especially those reliant on transportation, will face higher operational costs.

  • This could lead to increased prices for consumers or reduced profit margins for the businesses.

• Annie

  • So, overall, would you say this news is more of a negative development?

  
• 

  Kang-hoon

  • Yes, I would classify this as a negative development.

  • The increase in fuel costs will likely have a ripple effect throughout the economy, impacting both consumers and businesses adversely.

• Annie

  • Thank you for the detailed explanation, Kang-hoon.

  • This really helps me understand the implications better.

  
• 

  Kang-hoon

  • You're welcome, Annie.

  • Always happy to provide insights.

  • Upon comprehensive consideration, this news is perceived as a 😱Bearish.