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Import Fees on LNG for Power Generation to Be Cut 84% Starting on April 1
Prices of LNG for Power Generation to Go Down 7%
Import Fees on LNG for Power Generation to Be Cut 84% Starting on April 1
  • By Jung Suk-yee
  • March 20, 2019, 11:36
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Import fees on liquefied natural gas (LNG) for power generation will be lowered 84.2 percent beginning on April 1.

The Korean government will lower import fees on liquefied natural gas (LNG) for power generation beginning on April 1. Prices of gas for combined heat and power plants with a capacity of less than 100 megawatts will go down 6.9 percent. LNG-fired power plants emit less air pollutants such as fine dust than coal-fired ones.

The Korean government passed an amendment to the Enforcement Decree of the Petroleum and Petroleum Alternative Fuel Business Act in a cabinet meeting on March 19. Accordingly, beginning on April 1, import fees on LNG for power generation will plummet 84.2 percent from current 24.2 won per kilogram to 3.8 won.

Many experts have pointed out that the public charge and tax system for fuels for power generation has not adequately taken into account environmental costs such as costs caused by fine dust.

The environmental cost of LNG for power generation is about half that of bituminous coal. However, public charges and taxes on LNG are 2.5 times higher compared with those on bituminous coal. Public charges and taxes usually include the individual consumption tax, import fees and customs duties.

Therefore, the government decided to fix the taxation system in order to make the proportions of public charges and taxes on bituminous coal and LNG match those of their environmental costs in a revised tax act announced in July 2018.