Japan weighs extra budget as energy subsidies face higher costs
Officials say the government may boost reserves to fund summer power and gas support while maintaining gasoline aid amid surging energy prices.
- The Japanese government is considering a supplementary budget to handle the rising costs of energy subsidies.
- The extra funds would cover subsidies for electricity and city gas from July to September, in addition to continuing gasoline subsidies.
- This consideration is driven by sharply higher energy prices, which have been influenced by the war in Iran.
- Existing reserve funds are feared to be insufficient if the conflict is prolonged, prompting a potential decision on the extra budget this month.
Japan’s government is considering a supplementary budget to meet extra spending needs as it looks at offering subsidies for electricity and city gas from July to September while continuing gasoline subsidies, government and ruling party officials said Friday (May 15).
The plan under review would apparently use an extra budget to increase reserve funds, giving the government more room to respond if energy-related costs keep rising.
Prime Minister Sanae Takaichi is expected to decide as early as this month, with the timing likely to depend on developments in the war in Iran, which has pushed energy prices sharply higher.
Chief Cabinet Secretary Minoru Kihara told a press conference: “We will make appropriate decisions according to the situation and take necessary measures.”
As of the end of April, about 980 billion yen remained in the fund set aside for gasoline subsidies. However, the 1 trillion yen in reserve funds under the fiscal 2026 budget could prove insufficient if the Iran war is prolonged.
Takaichi told a parliamentary meeting on Monday that she did not believe a supplementary budget would be needed anytime soon, rejecting opposition parties’ calls for the government to prepare one.
[Copyright The Jiji Press, Ltd.]
