•South Korea’s new president, Lee Jae
South Korea aims to roll out a $17 billion “wartime” supplementary budget and expand fuel tax cuts as the war in Iran pushes up energy prices, the government said today.
Officials aim to “draw up a supplementary budget worth 25 trillion won next month — funded by excess tax revenue — in response to the prolonged Middle East conflict”, the government said in a statement.
Budget minister Park Hong-keun also said the bill aims to support small and mid-sized firms and vulnerable households hit by the prolonged war, reports AFP.
“We will first ease the burden on citizens caused by high oil prices and support the smooth implementation of an oil price cap system to stabilise domestic fuel prices and reduce fuel costs,” Park said.
Han Byung-do, the ruling Democratic Party’s floor leader, said it and the government would accelerate their review of the budget bill in the National Assembly, stressing there was “no reason for any delay”.
President Lee Jae Myung earlier urged the government to prepare a supplementary budget aimed at steadying the economy, supporting impacted industries, and strengthening supply chain resilience.
To ease the impact of rising energy prices, fuel tax cuts will also be expanded — to 15 percent from 7 percent on gasoline and to 25 percent from 10 percent on diesel, the finance ministry said in a separate statement.
Lee said tod the ongoing energy crunch could “impose unexpected burdens and inconvenience across people’s daily lives”.
Given that global supply chains are “far more complex” than before, it is “nearly impossible to pinpoint where risks lie and how far their impact may spread”, he added.
He urged the public to actively take part in “small” efforts to relieve pressure on fuel supplies, such as using public transportation.
Shorter Showers
Today’s announcement came days after the energy ministry issued guidelines urging the public to conserve energy.
It entailed a total of 12 recommendations, including taking shorter showers, walking or cycling for short distances, and charging mobile phones during daytime hours.
It also recommended using washing machines and vacuum cleaners only on weekends, if possible, and switching off unnecessary lights.
The energy crunch from the Middle East crisis is “grave”, and “there are limits to what the government can do alone”, energy minister Kim Sung-whan said in a statement.
He asked the public to “actively participate — even if it entails some inconvenience”.
Much of South Korea’s imports pass through the Strait of Hormuz, a critical shipping route that has been effectively shut by Iran since the United States and Israel began attacking the country on February 28.
South Korea’s ruling party said last week officials would lift a cap on coal-powered generation capacity set at 80 per cent and boost the use of nuclear power to about the same level.
The disruption along the key oil route has sent prices soaring and prompted Seoul to impose a fuel price cap for the first time in nearly 30 years.
