Japan to allocate 616 billion yen to maintain gasoline subsidies

The Japanese government has decided in a cabinet meeting to allocate 616 billion yen from the 2026 reserve funds to bolster subsidies for gasoline, diesel, and heavy oil. The measure aims to maintain regular gasoline prices at approximately 170 yen per liter to mitigate the impact of rising energy costs driven by instability in the Middle East.

Chief Cabinet Secretary Minoru Kihara stated that the decision is intended to protect livelihoods and ensure economic activities remain uninterrupted despite uncertain crude oil price forecasts. The allocation includes 2.4 billion yen to support taxi operators using LP gas. Additionally, the government will shift its aviation fuel support strategy by increasing subsidies for domestic flights—raising them from 40% to 80% of the gasoline equivalent—while ending support for international flights.

Economic Minister Ryosei Akazawa noted that the government will continue to monitor the Middle East situation and the resulting impact on prices and the economy to determine future support levels and exit strategies.