Koo Yun-cheol, Deputy Prime Minister and Minister of the Ministry of Economy and Finance, said he plans to designate naphtha, which has faced supply disruptions since the Middle East crisis, as an "economic security item" this week.
Once designated as an economic security item, tailored support such as diversifying import sources, expanding stockpiles, and developing alternative technologies will be provided, and in the event of a supply chain crisis it can be subject to additional stabilization measures, including designation as a crisis item and an emergency supply-control material.
Deputy Prime Minister Koo announced this through the "status of responses related to the Middle East situation" at a Cabinet meeting chaired by President Lee Jae-myung at the Government Complex Sejong on the morning of the 17th.
Deputy Prime Minister Koo said, "Supply disruptions are occurring in items such as naphtha, which has high dependence on the Strait of Hormuz (54% of imports)," adding, "Naphtha will be designated as an economic security item this week." He also said, "We will work to reduce the burden from transport disruptions and higher logistics costs facing small and midsize exporters through measures including a supplementary budget."
Naphtha is a basic feedstock used to produce plastic, synthetic resins, and synthetic fibers. Dependence on Middle Eastern supplies is high, and the domestic portion is also produced by refining imported crude, raising concerns about supply chain shocks. It is known that naphtha inventories held by domestic petrochemical corporations amount to only about two weeks' worth.
Deputy Prime Minister Koo also said he will push the following: ▲ swift formulation of a supplementary budget ▲ on-site inspections of the fuel price cap system ▲ a freeze on public utility rates in the first half ▲ expanded discount support for agricultural, livestock, and fishery products ▲ emergency Treasury bond buybacks if needed.