South Korea has unveiled plans to introduce a huge transport tax on diesel as part of the government's drive to curb air pollution and harmful emissions.

As of July this year, the domestic transport tax on diesel will see a rise of 14.4 per cent, Reuters reports.

The move is part of a plan to increase the domestic retail price of diesel to 85 per cent to that of gasoline, the finance ministry said.

However truckers and bus operators will receive government subsidies for the next three years, with increased taxes fully covered by the government.

Environmentally friendly fuels are to see a tax rebate, with a special consumption tax on liquefied petroleum gas (LPG) and butane, bringing their retail price to just 50 per cent of that of gasoline.