The South Korean government has temporarily designated naphtha as an economic security item due to supply disruptions caused by the conflict in the Middle East.
The South Korean government has taken decisive measures in response to ongoing supply disruptions of naphtha, a key industrial material, exacerbated by the conflict in the Middle East. Deputy Prime Minister and Minister of Economy and Finance, Koo Yoon-cheol, announced that naphtha will be temporarily classified as an economic security item, which will involve enhanced monitoring of supply and the diversification of import sources to mitigate potential impacts on both the public and domestic industries. The government aims to track naphtha supply trends and address issues faced by businesses, including seeking alternative supply routes and implementing active measures such as export restrictions.
In addition to designating naphtha as an economic security item, financial support for businesses affected by supply chain disruptions will be significantly increased. The newly established 'Middle East Victims Special Support Fund' will provide 1.5 trillion won in financial assistance to companies impacted by the supply chain crisis, including support for the differential in alternative imports and emergency operating funds. Companies heavily reliant on naphtha will be offered preferential interest rates of up to 2.3% points to alleviate the financial burden during this critical period. This initiative reflects the government's commitment to ensuring economic stability and supporting sectors vulnerable to external shocks.
Beyond these measures, Koo also emphasized the importance of controlling fuel prices, noting that the implementation of a maximum price system for petroleum products has led to significant reductions in supply prices from refining companies. Consequently, he urged gas stations to lower consumer prices promptly. The government will continuously monitor oil price trends and will rigorously crack down on unfair practices such as hoarding and refusal to sell. Furthermore, Koo indicated that the government would explore multiple demand management strategies, including the possibility of implementing a rotational registration system for cars to manage energy supply more efficiently.
