The South Korean government on Tuesday proposed a supplementary budget of 26.2 trillion won, equivalent to approximately $17.1 billion, to mitigate the effects of rising energy prices on households and industries. The proposal addresses increased costs and supply concerns linked to ongoing conflict in the Middle East.
According to the budget document released by the government, 10.1 trillion won is allocated to measures aimed at “easing the burden of high oil prices.” The proposal also includes support for exporters and an increase in financial grants to local governments.
In a statement, Minister of Planning and Budget Park Hong-geun described the government’s reasoning for the additional funds. “Swift fiscal support is necessary to alleviate the hardships facing the people’s livelihoods as soon as possible and to ensure that the spark of economic recovery, which the current administration has painstakingly revived, does not die out,” Park said.
The government’s action follows a period of increased global crude oil prices, which have risen since the United States and Israel conducted military strikes in Iran on Feb. 28.
South Korea’s economy is significantly dependent on imported energy. A 2024 report from the Korea Energy Statistics Information Systems stated that the country imports 94% of its energy. The report also noted that nearly 72% of its crude oil is sourced from the Middle East.
The proposed relief package contains several direct support measures. A central component is a 5 trillion won allocation for a petroleum price cap, a policy previously announced by President Lee Jae Myung on March 9. Other provisions include expanded refunds for public transportation passes and fuel subsidies for farmers, fishermen, and small-scale cargo ship operators.
The budget also designates 4.8 trillion won for consumer vouchers. The vouchers, ranging from 100,000 to 600,000 won per person, would be provided to the bottom 70% of earners, with specific amounts determined by income level and region. An additional 9.7 trillion won will be used to increase grants for local governments.
Minister Park stated that the supplementary budget would be funded by tax revenue from increased semiconductor exports and stock market performance.
The bill has been submitted to the National Assembly for consideration. According to reports from South Korean media, a vote on the measure is anticipated by April 10.
 budget to address rising energy costs for households and industries. Measures include price caps, consumer vouchers, and support for exporters, funded by tax revenue.){kind=link}