The Ministry of Trade, Industry and Resources has approved a supplementary budget of 924.1 billion won ($609 million) to address the Mideast crisis and its impact on energy and industrial supply chains. This decision follows the Cabinet’s approval of a 26.2 trillion-won supplementary budget bill aimed at mitigating challenges arising from the escalating conflict in the Middle East and revitalizing the local economy. If passed by the National Assembly, the budget will include cash handouts totaling 4.8 trillion won for the bottom 70 percent of income earners.
The ministry’s plan involves allocating 664.2 billion won to stabilize the supply of crude oil and strategic industrial materials, such as naphtha, in response to the effective closure of the Strait of Hormuz due to the Iran war. A significant portion of this amount, 469.5 billion won, will support domestic petrochemical companies with naphtha cracking facilities, while 158.4 billion won will be used to secure additional oil reserves.
Moreover, funds amounting to 22.3 billion won will be utilized for addressing unfair market practices related to fuel prices, with an additional 8.1 billion won allocated for establishing domestic production infrastructure for rare earths. The ministry also plans to inject 145.9 billion won to assist small and medium-sized enterprises grappling with export challenges due to the turmoil in the Middle East, as well as to support industries like petrochemicals affected by the situation.
Furthermore, 114 billion won is earmarked for promoting the adoption of artificial intelligence (AI) in manufacturing industries, including shipbuilding, steel, and automobile sectors, to enhance their long-term competitiveness. The supplementary budget bill is set to be presented to the National Assembly for approval, with agreement from rival parties to vote on the bill next Friday.
