On March 31, South Korea proposed a supplementary budget totaling 26.2 trillion won (approximately $17.1 billion) to address rising energy costs caused by supply disruptions stemming from the ongoing Middle East conflict, particularly following U.S. and Israeli strikes on Iran on February 28 [1]. The budget aims to ease the burden of high oil prices on households and industries, with 10.1 trillion won specifically allocated for this purpose. Key measures include a 5 trillion won petroleum price cap announced by President Lee Jae Myung on March 9, increased refunds for public transportation passes nationwide, and consumer vouchers ranging from 100,000 won to 600,000 won for the bottom 70% of earners, depending on income and region [1]. Additional support will be provided through fuel subsidies for farmers, fishermen, and small-scale cargo ship operators, as well as 9.7 trillion won in grants to local governments [1].
Minister of Planning and Budget Park Hong-geun emphasized the urgency of swift fiscal support to alleviate hardships and sustain the economic recovery, noting that South Korea imports 94% of its energy and nearly 72% of its crude oil from the Middle East, making it particularly vulnerable to supply shocks [1]. The supplementary budget will be funded by tax revenue generated from a boom in chip exports and a stock market rally [1].
The bill has been submitted to the National Assembly and is expected to receive support from the opposition People Power Party, with passage anticipated by April 10 [1].
CONCLUSION
South Korea's $17.1 billion supplementary budget represents a decisive response to the energy price surge triggered by Middle East tensions. The package targets both immediate relief for households and industries and broader economic stability, with funding sourced from strong export and market performance. The expected swift passage of the bill underscores its high market impact and the government's commitment to mitigating supply-driven inflation.