The government plans to expand oil stockpiling facilities by more than 20 million barrels. It is also reviewing adding naphtha, a basic petrochemical feedstock that has not been stockpiled, to the stockpile list. The naphtha supply was shaken by the Middle East war, but it was difficult to respond because there were no government reserves.
◇ "We felt the crucial importance of naphtha"… apply the domestic production promotion tax system
On the 14th, the government announced the "2026 second-half economic growth strategy," which includes these measures.
Vice Minister Lee Hyeong-il of the Ministry of Economy and Finance said, "(Due to the Middle East war) we felt the importance of naphtha acutely," and added, "We will review whether it is more advantageous to store naphtha or to increase crude oil further."
This takes into account that naphtha is highly volatile and difficult to store long term. The government is also reviewing stockpiling condensate instead of naphtha. For fertilizer-grade urea, it will prepare plans to newly stockpile both raw materials and finished goods.
For items that can be produced domestically, the government will newly introduce a domestic production tax credit. The amount calculated by multiplying the unit price by domestic production and sales volume will be deducted from corporate tax and income tax, linking the benefit to actual output unlike the existing integrated investment tax credit based on facility investment. For corporations with no tax liability due to initial losses, separate support measures will be reviewed.
Support for diversifying import sources will also increase. When replacing imports for items with more than 80% dependence on a specific country, the supply chain stabilization fund's low-interest loan limit will be raised to 100% from the current 80%–90%.
◇ Sovereign wealth funds to remain at KIC without creating a separate body… an additional 600 billion won Public Growth Fund to launch
The Korea-style sovereign wealth funds will be set up at the Korea Investment Corporation (KIC). A strategic investment account will be newly created and expanded into a comprehensive type within the year. The direction changed six months after saying at the end of last year that a separate corporation would be established. The Vice Minister added, "There is already name recognition as sovereign wealth funds, so leveraging the existing network is more meaningful than setting up a new one," and noted, "It also helps with swift establishment."
The Public Growth Fund will additionally launch a citizen-participation product in the third quarter worth 600 billion won. In the second half, the goal is to support more than 15 trillion won, including project approvals and the formation of sub-funds.
The government newly designated sensors, actuators (robot drives), and secondary batteries as flagship projects to lead the ultra-innovation economy. All three items are robot components. In defense, it will establish a Korea-style In-Q-Tel and allow the government and corporations to co-own defense technology intellectual property (IP).