President Lee Jae-myung of South Korea has officially confirmed plans to prepare supplementary budgets in response to rising fuel prices due to the ongoing U.S.-Iran conflict, which are expected to disproportionately affect low-income households and vulnerable populations. During a Cabinet meeting, he pointed out that a reduction in fuel taxes might exacerbate wealth inequality, as wealthier households, which generally consume more energy owing to owning larger and more cars, would benefit far more than lower-income families. Thus, the government is considering using the funds from the taxes to directly support these vulnerable groups instead.

The government's concerns are supported by studies indicating that a broad tax cut on fuel, which currently has an average rate of 28%, would yield significant benefits for the wealthiest 10% of households compared to the poorest 10%. For instance, it has been cited that the top earners would enjoy tax savings approximately 25.5 times greater than those in the lowest income bracket. Hence, the administration is likely to contemplate a controlled reduction in fuel taxes while simultaneously increasing direct financial assistance for vulnerable workers, such as delivery and transportation workers.

Furthermore, targeted aid measures could include subsidies indexed to fuel prices and expanded energy vouchers for low-income households. The government is also likely to increase support for sectors heavily impacted by rising fuel costs, such as trucking and agriculture, which faced similar challenges during the prior surge in global oil prices due to the Russia-Ukraine conflict. The administration is financially equipped to undertake these initiatives, easing concerns about budgetary constraints.