Seoul, March 31 – The Ministry of Trade, Industry and Resources announced on Tuesday that it has allocated 924.1 billion won ($609 million) in a supplementary budget to address the Middle East crisis amid disruptions in energy and industrial supply chains.
The announcement came after the Cabinet, chaired by President Lee Jae Myung, approved a government bill for a 26.2 trillion-won supplementary budget aimed at addressing difficulties stemming from the escalating conflict in the Middle East and revamping the local economy. If passed by the National Assembly, the bill will provide cash handouts totaling 4.8 trillion won to the bottom 70 percent of income earners.
The ministry plans to spend 664.2 billion won on stabilizing supplies of crude oil and strategic industrial materials, including naphtha, as the country has been facing difficulties in supplying these items due to the effective closure of the Strait of Hormuz following the outbreak of the Iran war, according to Yonhap news agency.
Of the 664.2 billion won, 469.5 billion won will be used to support domestic petrochemical companies operating naphtha cracking facilities, and another 158.4 billion won will be channeled into securing additional oil reserve supplies.
Approximately 22.3 billion won has been set aside for the government's response to unfair market practices involving fuel prices, while another 8.1 billion won will be earmarked for establishing domestic production infrastructure of rare earths, according to the ministry.
The ministry also stated that it will inject 145.9 billion won into supporting small and medium-sized firms facing export difficulties due to the Middle Eastern turmoil, as well as helping petrochemical and other industries affected by the situation.
Additionally, the ministry plans to spend 114 billion won on promoting the artificial intelligence (AI) transformation of manufacturing industries, including shipbuilding, steel, and automobiles, in order to boost the long-term competitiveness of these sectors.
The supplementary budget bill will soon be submitted to the National Assembly for approval, with the rival parties having previously agreed to vote on the bill next Friday.
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