Seoul: The government will temporarily designate naphtha as an economic security item following supply shortages due to the ongoing crisis in the Middle East, Finance Minister Koo Yun-cheol announced Wednesday. South Korea imports more than half of its naphtha through the Strait of Hormuz, which has effectively been closed due to heightened regional tensions. The designation will allow companies to receive government support related to supply chain stability.

According to Yonhap News Agency, Finance Minister Koo Yun-cheol stated, "We will closely monitor naphtha supply trends and difficulties faced by companies, and take proactive measures, such as securing alternative import sources and restricting exports," during a meeting with economy-related ministers. To mitigate the challenges faced by affected companies, the government will expand financial support by 1.5 trillion won (US$1 billion). This support will include assistance with higher costs for alternative imports and preferential interest rates for companies handling high-risk economic security items.

The minister further emphasized that the government will also swiftly implement all available policy tools, such as a supplementary budget, following the already enforced oil price cap system.