Industry ministry expands crude import fee refunds to ease Middle East reliance

The industry ministry said Wednesday it will expand refunds on crude oil import fees through December to stabilize supply chains and reduce South Korea's dependence on Middle Eastern energy sources.

Extending a temporary relief program originally implemented from April to June, the decision waives the standard minimum import volume of 4 million barrels and the one-year long-term contract requirement for domestic refiners importing diversified crude from the Americas, Europe or Africa. The move comes as uncertainty surrounding the Middle East conflict persists.

"The government decided to re-implement the expanded refund policy as the uncertainty of the Middle East war continues," the ministry said in a statement following the sixth Charge Management Deliberation Committee meeting.

Under the revised terms, the ministry plans to reimburse up to 100 percent of the freight cost difference between Middle Eastern and non-Middle Eastern crude, capped at the total amount of import fees paid during the period. Previously, the refund system covered only about 25 percent of the differential. The underlying levy is a statutory charge collected from importers of crude oil, petroleum products and natural gas, with rates set at 16 won per liter for crude and petroleum products, 3,800 won per ton for power-generation natural gas, and 24,242 won per ton for non-power generation use. Funds generated are allocated to a special account dedicated to stabilizing petroleum supply and prices.