The Korean Ministry of Industry allocated 9.241 trillion won from the supplementary budget to address the Middle East crisis.

The Ministry of Trade, Industry and Energy of South Korea said on Tuesday that it has allocated 924.1 billion won (about US$609 million) from the supplementary budget to address disruptions to energy and industrial supply chains caused by the crisis in the Middle East.

Earlier, a government supplementary budget package totaling 26.2 trillion won, led by the Cabinet presided over by South Korean President Yoon Jae-in, was approved with the aim of tackling challenges stemming from an escalation of the conflict in the Middle East and revitalizing the South Korean economy. If the budget package is passed by the National Assembly, it will provide cash subsidies totaling 4.8 trillion won to the 70% of people with the lowest incomes.

The Ministry of Trade, Industry and Energy of South Korea said it plans to invest 664.2 billion won to secure the supply of crude oil and strategic industrial materials, including naphtha. As the Strait of Hormuz was fully blocked following the outbreak of the Iran conflict, South Korea has faced difficulties in supplying these materials.

Of the 664.2 billion won, 469.5 billion won will be used to support domestic petrochemical companies that have naphtha cracking facilities, while another 158.4 billion won will be used to ensure additional oil reserves supply.

According to the ministry, the government has set aside about 22.3 billion won to address unfair market practices involving fuel prices, and an additional 8.1 billion won to establish domestic rare-earth production facilities.

The Ministry of Trade, Industry and Energy of South Korea said it will also invest 145.9 billion won to support small and medium-sized enterprises facing export difficulties due to instability in the Middle East situation, and to help petrochemical and other industries affected by this situation weather the challenge.

In addition, the ministry plans to invest 114 billion won to promote the artificial intelligence (AI) transformation of manufacturing industries (including shipbuilding, steel, and automobiles) to strengthen the long-term competitiveness of these sectors.

The supplementary budget bill is set to be submitted to the National Assembly of South Korea for approval, and opposition parties had previously agreed to vote on the bill next Friday.

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