South Korea to apply zero tariffs on LNG, LPG to combat inflation

Key facts

• South Korea will apply zero tariff rates on LNG and LPG within quotas in the second half of 2026.
• The measure aims to stabilize consumer prices by lowering utility and transportation costs.
• Consumer prices in South Korea rose 3.1% in May, the fastest growth in 26 months.
• The tariff-rate quota system allows certain import volumes to benefit from lower tariff rates.
• Nine additional agricultural products and two types of animal feed will also be subject to the tariff-rate quota system.
• Existing tariff cuts on bananas, pineapples, and mangoes will continue until mid-August.

South Korea plans to implement zero tariff rates on liquefied natural gas (LNG) and liquefied petroleum gas (LPG) within quotas in the second half of 2026, the finance ministry announced. This initiative is part of the country's strategy to combat inflation by reducing utility and transportation costs, which have been impacted by global energy price volatility.

The government's earlier plan involved lowering LNG tariffs to 2% in the third quarter and 1% in the fourth quarter, with LPG and crude oil used for LPG production tariffs dropping to 1% in the second half. The ministry stated that commissioned research consistently shows the tariff-rate quota system effectively pressures consumer prices downward in the energy sector.

South Korea's consumer prices saw a 3.1% increase in May compared to the previous year, marking the fastest growth in 26 months. The tariff-rate quota system allows specific import volumes to benefit from reduced tariff rates within set limits.

In addition to energy products, South Korea will extend the tariff-rate quota system to nine other agricultural products, including grape concentrate and juice, as well as two types of animal feed, through the end of the year. Current tariff cuts on bananas, pineapples, and mangoes will remain in effect until mid-August, aligning with the domestic fruit harvesting season.