AI to help crack down on fraudulent fuel subsidies for truck owners

South Korea will overhaul its fraud management system for trucking fuel subsidies to ensure support reaches those who genuinely need it, deploying AI-based detection, on-site inspections at gas stations and prevention-focused oversight.

The Ministry of Land, Infrastructure and Transport announced Sunday it had drawn up a comprehensive plan to eliminate fraudulent claims under the trucking fuel subsidy program, with measures to be rolled out in phases in the second half of the year.

The fuel subsidy is a key support program designed to ease fuel costs for truck owners. As of 2025, it covers approximately 430,000 vehicles at a total of 1.27 trillion won ($817 million) per year.

The ministry has pursued various enforcement measures — including a system for monitoring suspicious transactions, information sharing with relevant agencies and joint inspections — yet fraud has persisted. Last year alone, 731 cases of fraudulent claims worth about 500 million won were detected.

The government believes that because enforcement patterns have become predictable, new forms of fraud are emerging. Cases involving collusion with gas stations have declined, but a growing number of truck owners are now fueling their personal passenger vehicles at self-service stations and claiming the subsidy — a solo form of fraud that has risen alongside the spread of self-service pumps.

In response, the ministry is moving beyond conventional enforcement toward a more precise and systematic approach. It plans to transition to an "intelligent management system" that uses AI to learn from past cases and transaction patterns to detect fraudulent behavior.

On-site inspections at gas stations will also be significantly stepped up, shifting from a twice-yearly schedule to monthly checks. CCTV footage will be reviewed to focus enforcement on key violations such as fueling vehicles other than the registered truck.

Gas stations without CCTV or where footage is difficult to identify will be barred from accepting fuel purchase card transactions. The ministry will also subsidize the cost of upgrading outdated CCTV systems to improve inspection effectiveness.

Penalties for those caught committing fraud will be doubled. A first offense will result in a subsidy payment suspension of one year, up from six months, while two violations within a year will trigger a two-year suspension, up from one year.

Prevention-focused measures will also be strengthened, including placing stickers near fuel pumps and card terminals warning against fraudulent claims.

The ministry plans to implement the measures in stages beginning in the second half of the year, with regulatory changes to be addressed through legislative amendments. It also pledged to work with local governments and the Korea Petroleum Management Institute to sustain efforts to eradicate subsidy fraud.