MOSCOW (MRC) -- South Korea has removed tariffs on imports of naphtha and crude oil used to produce the material, the finance ministry said Thursday, in line with efforts to support the local petrochemical industry, said Koreaherald.
Under the measure, the tariffs on all naphtha imports will be lowered to zero through the end of 2023 immediately, compared with the current 0.5 percent, according to the Ministry of Economy and Finance.
Those on crude oil used to produce naphtha will also be lowered to zero for the amount not exceeding 100 million barrels over the period. Naphtha is a key material used in the production of rubber, plastic, and synthetic fiber.
"South Korea has been importing naphtha, or purchased crude oil to produce it. But the prolonged war between Russia and Ukraine has disrupted imports from Russia, leading to price burdens for companies," the ministry said.
The ministry said the removal of tariffs is crucial, considering that other rivals of local petrochemical companies in China and India have recently expanded investment in their production facilities, which may deal a harsh blow to South Korea's related exports down the road.
We remind, South Korean petrochemical operator LG Chem said on Monday it is considering various ways of improving the company's competitiveness. The comment came following a media report it was seeking to sell its naphtha cracker in Yeosu, though the company said nothing has been decided yet.