South Korea proposes over $17 billion in additional budget to ease energy costs as Iran war rages on
Workers install solar infrastructure at a public parking lot on the grounds of the National Assembly in Yeouido, Seoul, on March 26, 2026.
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South Korea on Tuesday proposed an additional budget worth 26.2 trillion won (about $17.1 billion) to ease the burden on households and industry of rising energy prices as conflict in the Middle East creates supply shortages.
According to Google Translate of the Korean budget document, about 10.1 trillion won will be directly aimed at “alleviating the burden of high oil prices”; Other measures will include support for exporters and an increase in grants to local governments.
Minister of Planning and Budget Park Hong-geun wrote: “Swift fiscal support is necessary to alleviate the challenges facing people’s livelihoods as soon as possible and ensure that the spark of economic recovery that the current administration has meticulously revived does not fade.”
Crude oil prices have been on the rise since the US and Israel attacked Iran on February 28 as supply shortages hit Asian economies, especially those heavily reliant on imports from the Middle East.
South Korea, Asia’s fourth largest economy, imports 94 percent of its energy 2024 report of Korea Energy Statistics Information SystemsAlmost 72% of its crude oil comes from the Middle East.
At the heart of the 10.1 trillion won package is a 5 trillion won tranche of the oil price ceiling announced by President Lee Jae Myung on March 9.
Seoul will also issue a higher refund for nationwide public transportation passes. The country will allocate 4.8 trillion won for consumer vouchers ranging from 100,000 won to 600,000 won per capita to the bottom 70% of earners, depending on income and region.
Other measures in the aid package include fuel subsidies for farmers and fishermen, as well as small-scale cargo ship operators.
Approximately 9.7 trillion won will be used to increase grants for local governments.
Park said that this budget will be financed with tax revenues from the boom in chip exports and the rise in the stock market.
South Korean media He reported that the bill has been submitted to the National Assembly and is expected to be supported by the opposition People’s Power Party. It is expected to become law by April 10.
