Koo: working on extra budget to support groups hit by oil shock

South Korea’s government is advancing plans for a targeted supplementary budget to alleviate the economic strain caused by surging fuel prices linked to escalating Middle East tensions. Finance Minister Koo Yun-cheol emphasized during an emergency economic ministers’ meeting that the measure aims to support vulnerable sectors, including truck drivers, farmers, fishermen, and small businesses, which face heightened operational costs due to volatile energy markets according to government sources. The proposed budget could include temporary fuel price caps, extended fuel tax cuts, and subsidies for diesel used in freight and public transportation as reported.

To address market instability, authorities are implementing a zero-tolerance policy against hoarding, price gouging, and speculative practices by oil refiners and gas stations according to emergency measures. The government also plans to monitor global oil prices biweekly to assess the need for adjustments to the price cap, which may be lifted if prices fall below 1,800 won ($1.23) per liter according to the plan.

Funding for the supplementary budget may draw from projected excess tax revenues, particularly from corporate and securities transaction taxes, as well as expenditure restructuring according to fiscal analysis. While the scale remains fluid, estimates suggest it could range between 10–20 trillion won, contingent on the duration of the crisis and its impact on inflation and tax collections as projected.

Koo highlighted South Korea’s strategic oil reserves—equivalent to 208 days of consumption under IEA standards—as a buffer against supply disruptions, while stressing the need for fiscal prudence to avoid populist spending according to Bloomberg reporting. The government aims to balance immediate relief with long-term economic stability, ensuring targeted support for those most affected by the oil shock as part of the economic strategy.