South Korea will extend its fuel tax cut scheme by another two months through November to ease price burdens on the public amid protracted tensions in the Middle East, the finance ministry here said on Friday. 

The Ministry of Finance and Economy said the decision was made during an economy-related ministers' meeting chaired by Finance Minister Koo Yun-cheol, citing the need to ease the public's burden from fuel costs.

Under the measure, the current tax reductions of 15 percent for gasoline and 25 percent for diesel and butane, originally set to expire at the end of this month, will remain in place through the end of November, reports Yonhap news agency.

"We have decided to maintain the current tax cut scheme, considering the country's capacity to address a possible increase in oil price volatility," the finance ministry said in a release.

The country has decided to maintain larger tax cuts for diesel, which is essential for industrial and logistics activities, and butane, which is widely used as fuel for small trucks, it added.

Meanwhile, Seoul stocks were trading sharply higher late on Friday morning as investors snapped up market heavyweights amid eased inflation woes.

The benchmark Korea Composite Stock Price Index (KOSPI) was trading up 135.91 points, or 2.02 percent, to 6,851.32 as of 11:20 am (local time).

Investor sentiment improved on a fall in oil prices and eased uncertainties over inflation, following the rate hike by the Federal Reserve.

Market top-cap Samsung Electronics added 2.48 percent, while rival SK hynix advanced 4.41 percent.

Carmaker Hyundai Motor rose 0.96 percent, defence giant Hanwha Aerospace strengthened 0.82 percent, and major financial firm KB Financial was down 1.95 percent.

The Korean won was trading at 1,385.4 won against the U.S. dollar as of 11:20 a.m., down 3.9 won from the close of the previous stock trading session.