The South Korean government and the Democratic Party of Korea are pushing to lower automobile insurance premiums in conjunction with the "5/2-day vehicle rotation system" currently in effect to address the Middle East crisis. The rationale is to return the benefits of reduced driving mileage and lower accident risks—stemming from the mandatory driving restrictions—to the public.
On the 13th, the National Assembly's Special Committee on Economic Response to the Middle East War held its third meeting to discuss these measures. Rep. Ahn Do-geol, the committee’s secretary, stated, "The implementation of the 5/2-day rotation system has led to a clear reduction in vehicle usage. We are coordinating with financial authorities and the insurance industry to announce a specific plan for premium cuts by next week at the latest."
The government estimates that the 5-day rotation system alone saves 6,900 barrels of oil monthly. If expanded to a 2-day system, savings could jump to between 17,000 and 87,000 barrels per month.
Regarding energy supply, the committee maintained a cautiously optimistic stance. Major domestic refiners have secured approximately 30 million barrels of crude oil through strategic reserve swaps. Rep. Ahn explained that the supply for April and May is being maintained at about 60% of average years. To counter rising naphtha prices, the government is considering increasing the ratio of recycled materials in industrial products from 10% to 30%.
To tackle supply chain bottlenecks for daily necessities—such as instant noodles, medical syringes, and garbage bags—the government plans to launch a digital monitoring system. This system, led by the Ministry of Climate and Energy, will publicly disclose logistics data across local governments to prevent panic buying. "We currently have 3 to 5 months of inventory for garbage bags, so there is no need for excessive concern," Ahn added.
On the fiscal front, the government agreed to fast-track the execution of the 26.2 trillion won supplementary budget. The goal is to deploy 85% of these funds by the end of June to mitigate economic downside risks. Meanwhile, the request from gas station operators to lower credit card transaction fees remains under review due to concerns over fairness among different business scales.
These measures reflect the government's firm commitment to maintaining economic resilience by sharing the burden between the public and private sectors as geopolitical risks in the Middle East persist.
[Copyright (c) Global Economic Times. All Rights Reserved.]
