MOTIE to inject 664.2 billion won for emergency support on naphtha and oil, 139 billion won to back corporate exports

[Financial News] The Ministry of Trade, Industry and Resources (MOTIR) has decided to allocate an additional 600 billion won in a supplementary budget to support naphtha supply and expand strategic oil reserves. The aim is to speed up the recovery of key resource supply chains that have deteriorated since the war in the Middle East. Around 135 billion won has been earmarked to ease cost burdens for exporting companies, and about 114 billion won for AI-based manufacturing transformation (AX).
In the first 2026 supplementary budget confirmed at the State Council of South Korea on the 31st, 924.1 billion won was allocated to programs under MOTIR. The ministry plans to spend this budget in three main areas: 664.2 billion won for stabilizing oil and key resource supply chains, 145.9 billion won to reduce costs for exporting companies and support hard‐hit industries such as petrochemicals, and 114 billion won for manufacturing AX.
First, 664.2 billion won will be injected specifically to stabilize supply chains.
Of this, 469.5 billion won will go to the most urgent task: stabilizing naphtha supply. The support will target petrochemical companies that operate naphtha cracking facilities. MOTIR plans to subsidize 50% of the increase in naphtha import costs incurred after the Middle East crisis for these firms.
A total of 158.4 billion won has been set aside to expand oil stockpiles by an additional 1.3 million barrels. The government intends to reach the 2030 target under the fifth oil stockpiling plan ahead of schedule. Another 22.3 billion won will be added to crack down on illegal activities in the oil market, such as the sale of fake oil and hoarding. An additional 2 billion won will go to the Oil Market Monitoring Group, led mainly by civic organizations, and to upgrading the public oil price information system.
Compensation for corporate losses arising from the oil price cap will be funded separately through earmarked contingency reserves, not from MOTIR’s supplementary budget. The ministry plans to disburse these reserves in a timely manner after consultations with relevant ministries and deliberation by the State Council of South Korea.
An additional 8.1 billion won will be provided to build a domestic production base for rare earths, a strategic resource. Another 3.9 billion won will support diversification of import sources for urea, which is heavily dependent on the Middle East.
Around 145.9 billion won will be invested to ease the burden on exporting companies.
Small and medium-sized exporters, as well as mid-sized firms facing export difficulties due to the closure of the Strait of Hormuz, will receive various forms of assistance. This includes 25.5 billion won for emergency support vouchers, 7.5 billion won for overseas branch support, and 5.9 billion won for shared logistics centers abroad. In addition, 100 billion won will be injected into the Trade Insurance Fund to back 3 trillion won worth of trade insurance and liquidity support.
A further 7 billion won will be directed to industrial crisis zones where petrochemicals are the main industry.
A total of 114 billion won has been allocated for manufacturing AX. To accelerate manufacturing innovation, 80 billion won has been newly assigned. New funding of 14 billion won and 20 billion won will support demonstration projects for AX-related data centers and AI robots, respectively.
jhyuk@fnnews.com Reporter Kim Jun-hyuk Reporter