Industry ministry earmarks 924 bln won in extra budget for Mideast crisis...

industry ministry-extra budget

Industry ministry earmarks 924 bln won in extra budget for Mideast crisis response

SEOUL, March 31 (Yonhap) -- The Ministry of Trade, Industry and Resources said Tuesday it has allocated 924.1 billion won (US$609 million) in a supplementary budget to respond to the Mideast 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 tackling difficulties stemming from the escalating conflict in the Middle East and revamping the local economy, which, if passed by the National Assembly, 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 the items with the effective closure of the Strait of Hormuz following the outbreak of the Iran war.

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 funneled into securing additional oil reserve supplies.

Some 22.3 billion won has been set aside for the government response to unfair market practices involving fuel prices, with another 8.1 billion won earmarked for establishing domestic production infrastructure of rare earths, according to the ministry.

The ministry said it will also inject 145.9 billion won into supporting small and medium-sized firms facing export difficulties due to the Middle Eastern turmoil and helping petrochemical and other industries taking a blow from 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 automobile, in a bid to boost the long-term competitiveness of the sectors.

The supplementary budget bill will soon be reported to the National Assembly for approval, with the rival parties earlier agreeing to vote on the bill next Friday.

The Ministry of Trade, Industry and Resources headquarters in the central city of Sejong (Yonhap)