The National Assembly is pushing a plan to provide approximately 120 billion won ($88 million) in electricity fee subsidies to companies in preemptive industrial crisis response regions such as Yeosu and Pohang. The measure aims to ease the burden on petrochemical and steel industries that have struggled with global oversupply, with costs further compounded by the fallout from the Middle East conflict. However, whether the support will actually be reflected in the current supplementary budget remains uncertain due to fiscal constraints and regional equity concerns.
According to the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee on Wednesday, lawmakers including Rep. Jeong Jin-uk of the Democratic Party of Korea agreed at a party-government policy consultation held at the National Assembly to propose a 120 billion won budget to the Special Committee on Budget and Accounts and the government to ease companies' electricity cost burdens. The move reflects an intent to demand additional support during the supplementary budget review process as regional companies' financial difficulties deepen. An aide to Rep. Jeong said, "We plan to make related requests during the government interpellation session scheduled this month as well."
The Ministry of Trade, Industry and Energy (MOTIE) had initially reviewed allocating approximately 120 billion won in fiscal spending to support electricity fees for companies in preemptive industrial crisis response regions, but reportedly could not include it in the government's budget proposal due to fiscal constraints. A committee official explained, "Since the supplementary budget is funded solely by excess tax revenue, resources are not ample," adding, "We understand it was not reflected in the government proposal because regional equity concerns were raised over support being directed to only certain areas."
The National Assembly is raising the need for support despite the fiscal burden because conditions on the ground have reached a critical point. The petrochemical industry in complexes such as Yeosu Industrial Complex is seeing prices of key feedstocks like naphtha rise due to higher oil prices, but weak demand amid the global economic slowdown has prevented companies from passing these costs on to final product prices. The steel industry is also under cost pressure as rising electricity costs from surging oil prices are compounded by higher raw material procurement expenses. The structure is such that the more factories operate, the greater the losses, as war-driven oil price increases have been added to the existing industrial downturn.
The committee agreed that this supplementary budget should stabilize supply chains for petroleum and key strategic resources and ease cost burdens on affected industries including exporters. The plan includes supporting naphtha procurement essential for manufacturing daily necessities, expanding petroleum reserves to strengthen crisis response capabilities. For companies facing export difficulties, the committee also decided to pursue measures including logistics cost relief, development of alternative markets, overseas branch establishment, and support for overseas joint logistics centers.
A committee official said, "Electricity fee support is the industry's most urgent demand," adding, "Given the emergency situation, we plan to continue reviewing additional support measures beyond those currently included in the supplementary budget."