Fears of Naphtha Crisis Grow Amid Middle East Tensions
As concerns mount over potential disruptions to naphtha supply, a fundamental industrial raw material, due to instability in the Middle East, the government has decided to inject a supplementary budget of 1.098 trillion won to alleviate the burden of rising raw material costs for petrochemical companies. A significant portion of this budget will be allocated to securing stable supply chains for key resources like crude oil and naphtha, with 674.4 billion won earmarked for subsidizing 50% of naphtha price increases. The Ministry of Trade, Industry and Energy's budget includes funds for stabilizing strategic resource supply chains in the Middle East, and the 'Comprehensive Support Project for Material, Component, and Equipment Supply Chain Stabilization' has seen its budget increase by 678.3 billion won from the original 135 billion won, totaling 813.3 billion won.
In preparation for emergencies, the government has increased investment in the oil stockpiling project by 158.4 billion won, bringing the total to 213.7 billion won. A total of 145.9 billion won will be invested to support companies and industries affected by the Middle East conflict, which includes a 100 billion won increase in contributions to the trade insurance fund. This support also encompasses utilizing export support infrastructure, responding to regional industrial crises, and KOTRA support. Funds have also been increased for improving the oil distribution structure, fostering industries for the re-resourceation of key minerals, and contributing to the Korea Resources Corporation.
A supplementary budget of 83 billion won has also been allocated for the AI transformation of the manufacturing industry. Through this, research and development projects for AI model development based on manufacturing tacit knowledge, valued at 48 billion won, and the creation of a K-robot physical AI ecosystem, valued at 500 million won, will be newly pursued. Funding has also been bolstered for improving the industrial complex environment and expanding the supply of intelligent robots.
Meanwhile, the National Assembly passed a supplementary budget bill totaling 26.2 trillion won. An official from the Ministry of Trade, Industry and Energy stated that efforts will be made to maximize the impact of the supplementary budget through swift execution and to manage the implemented projects.