On March 31, 2026, the South Korean government unveiled a sweeping supplementary budget aimed at tackling the surging cost of oil and easing the burden on households and businesses across the country. The plan, which totals a staggering 26.2 trillion won, is the most ambitious package yet to address the economic fallout from global energy market disruptions, including the recent closure of the Strait of Hormuz that sent oil prices soaring.
At the heart of the new measures is a dramatic expansion of the K-pass public transportation refund program. According to the Ministry of Strategy and Finance, the K-pass refund rate will be temporarily boosted by up to 30 percentage points for a six-month period, marking the most generous rate since the program's inception. This means that low-income users who spend 100,000 won on public transportation will now be eligible to receive 83,000 won back—an unprecedented 83% refund rate. General users will see their refund rate rise from 20% to 30%, while three-child families will benefit from a jump from 50% to 75%. Youth, elderly, and two-child households will also see rates climb from 30% to 45%.
The government anticipates that this expansion will bring an additional 650,000 people into the K-pass system, encouraging a shift from private vehicle use to public transportation and, hopefully, easing the pressure on both wallets and the environment. As one official from the Ministry of Trade, Industry and Energy explained, “This measure is designed to both alleviate the burden of high fuel prices and promote the use of public transit for a more sustainable future.”
But the K-pass changes are just one piece of a much larger puzzle. Of the total 26.2 trillion won supplementary budget, a hefty 10.1 trillion won has been earmarked specifically to offset high oil prices. This includes 5.1 trillion won for nationwide fuel and transportation cost relief, with 5 trillion won dedicated to an expanded petroleum price ceiling system. This price ceiling, which previously covered gasoline, vehicle diesel, and kerosene, will now be extended to include ship diesel—a move that brings relief to fishermen and small cargo ship owners who have been hit especially hard by the price spikes.
The government’s support for ship diesel is particularly notable. From April, the state will subsidize 50% of any price increase above 1,700 won per liter for ship diesel, up to a cap of 183 won per liter. For the month of April, the support rate will be temporarily increased to 70%. This adjustment recognizes the unique challenges faced by the maritime industry, where rising oil costs have threatened the viability of both coastal freight and fishing operations. As reported by Yonhap News Agency, “This is a crucial step to ensure that the impact of high oil prices does not cripple our coastal logistics and fisheries.”
For farmers and rural communities, the supplementary budget brings a suite of targeted supports. The government will invest 100 billion won in tax-free fuel and fertilizer purchases for farmers and fishermen, including 42 billion won for mineral fertilizer and 65 billion won for livestock feed policy funds. Facility farms and fishermen—numbering 54,000 and 29,000 respectively—will receive temporary, oil price-linked subsidies to help them weather the storm. These efforts are designed to stabilize food production and rural livelihoods at a time when global supply chains remain fragile.
Energy welfare for vulnerable groups is another cornerstone of the plan. Approximately 200,000 low-income households using kerosene and LPG—including the elderly, disabled, infants, pregnant women, multi-child, and single-parent families—will receive an extra 50,000 won in energy vouchers. This comes on top of prior increases announced for the winter season, meaning this year’s support will be roughly 200,000 won higher than last year for many recipients. As highlighted by Newsis, “The government has structured these payments to provide the thickest support to those in the most remote or disadvantaged regions.”
Perhaps one of the most innovative features of the package is the expansion of the rural basic income pilot program. With 70.6 billion won allocated for the latter half of 2026, the number of rural regions participating in the program will increase from 10 to 15. Residents in these areas, many of which are facing steep population declines, will receive a basic income of 150,000 won per month. The government hopes this will help stem the tide of depopulation and revitalize struggling rural economies.
Direct relief payments are also on the way for a broad swath of the population. The government will provide 4.8 trillion won in high oil price relief payments to the bottom 70% of income earners—a total of 32.56 million people, including low-income and basic livelihood recipients. The amount varies by region: 100,000 won in metropolitan areas, 150,000 won in non-metropolitan areas, 200,000 won in population decline priority areas, and 250,000 won in special population decline areas. These payments will function much like local currency, intended to bolster local economies while cushioning households from the shock of rising prices.
To fund these ambitious initiatives, the government is also setting aside 4.2 trillion won to offset losses incurred by refiners as a result of the petroleum price ceiling. The ceiling will be in effect for up to six months, split into two three-month periods, allowing for adjustments as market conditions evolve. Additionally, 7 trillion won will be spent on supporting naphtha imports and expanding petroleum reserves, ensuring the country’s energy security in an increasingly volatile global market.
Park Hong-geun, Minister of Strategy and Finance, underscored the urgency of this multifaceted response. “Now, more than ever, proactive measures are essential,” he stated. “We must act quickly to ease the difficulties facing the public and prevent the embers of economic recovery from being extinguished.”
The supplementary budget represents a layered safety net, with relief measures carefully calibrated for the general public, working-class families, and the most vulnerable. The government’s approach aims to address immediate pain points—like fuel and transport costs—while also investing in longer-term resilience for rural areas and key industries. The expectation is that this combination of direct payments, subsidies, and structural reforms will help households weather the current crisis and lay the groundwork for a more stable future.
As oil prices remain unpredictable and the global economic outlook uncertain, South Korea’s aggressive fiscal intervention stands as a bold attempt to shield its citizens from further hardship. Whether these measures will be enough to restore confidence and spur recovery remains to be seen, but for many families and businesses, the relief can’t come soon enough.