Government to Cover 50% of Naphtha Import Costs with 674.4 Billion Won to Safeguard Supply

Ministry of Trade, Industry and Energy Holds Supply Review Meeting
50% Support for Import Price Differences
Full Shipping Cost Coverage for Non-Middle Eastern Crude Oil

Despite a short-term truce between the United States and Iran, the ongoing uncertainty in the Middle East has prompted the government to review the supply of naphtha and crude oil.

Kim Jung-kwan, Minister of Trade, Industry and Energy, is delivering a welcoming speech at the 'Crude Oil and Naphtha Supply Response Review Meeting' held at the Coal Hall in Jongno-gu, Seoul on April 15, 2026. Photo by Kang Jinhyung

On April 15, Minister of Trade, Industry and Energy Kim Jungkwan convened the "Naphtha and Crude Oil Supply Response Review Meeting" at the main conference room of the Coal Hall to assess the domestic supply situation and discuss future response measures.

The meeting was attended by relevant ministries, including the Ministry of Oceans and Fisheries and the Ministry of Foreign Affairs, as well as representatives from the shipping, refining, and petrochemical industries. Participants carried out a comprehensive review of the current status of naphtha and crude oil imports, plans to secure alternative shipping routes, and strategies for petroleum product production and supply. They also shared industry challenges and suggestions.

Minister Kim stated, "We will safeguard the continuity of daily life and industrial activity for the public by diversifying naphtha and crude oil supply sources and securing alternative logistics networks. The government and industry will work closely together to mobilize all available policy tools to immediately resolve issues on the ground."

Although military tensions in the Middle East have temporarily eased, key risks such as uncertainty regarding the passage through the Strait of Hormuz and maritime transport remain unresolved. South Korea, in particular, relies on the Middle East for 73% of its naphtha imports and 69% of its crude oil imports, meaning supply disruptions remain a possibility due to geopolitical variables.

In response, the government is implementing a support program for naphtha import costs totaling 67.44 billion won. The core of the program is to provide support for 50% of the price difference between pre-war prices and actual import prices for naphtha import contracts concluded from April to June.

The scope of support covers not only naphtha but also alternative feedstocks such as LPG and condensate, as well as basic olefins including ethylene and propylene. By doing so, the government aims to address short-term naphtha supply instability and quickly normalize the operating rates of petrochemical facilities.

The government plans to increase domestic operating rates, which have fallen since the outbreak of the war, by expanding naphtha imports and boosting the supply of petrochemical products to the domestic market. At the same time, raw materials will be supplied with top priority to sectors directly related to public welfare, such as healthcare, key industries, and daily necessities, to minimize supply disruptions.

Diversification of crude oil imports is also underway. The government will reform the petroleum import levy refund system to expand support for crude oil imported from the Americas, Africa, and Europe. For crude oil imported from non-Middle Eastern regions from April to June, the government will cover the full difference in shipping costs compared to Middle Eastern crude, with the expected refund amounting to approximately 12.75 billion won.

Through these measures, the government aims to reduce dependence on the Middle East and establish a stable import structure even in the event of a crude oil supply crisis.

This content was produced with the assistance of AI translation services.