Japan plans extra budget as Iran tensions drive up energy costs
Prime Minister Sanae Takaichi orders fiscal steps as the government seeks lower power and gas bills and possible fuel subsidy extensions.
- The Japanese government is preparing a supplementary budget to address rising prices and minimize economic risks linked to tensions in the Middle East involving Iran.
- The budget is intended to fund measures to lower energy costs, including extending subsidies for gasoline and reducing electricity and gas charges for the public.
- Prime Minister Sanae Takaichi has directed the finance ministry to prepare the fiscal measures, with the goal of submitting the extra budget bill to the Diet before July 17.
Prime Minister Sanae Takaichi told a government-ruling parties liaison meeting at the prime minister’s office on Monday (May 18) that she had directed Finance Minister Satsuki Katayama to prepare fiscal measures, including a supplementary budget, to “minimise risks”.
On concerns over supplies of oil-related products amid the Middle East situation, Takaichi said, “We will do everything to resolve supply problems so that the people and their daily lives will not be affected.”
She also asked the policy chiefs of the ruling Liberal Democratic Party and its coalition partner, the Japan Innovation Party, to quickly put together a plan to bring electricity and gas charges for July-September below last year’s levels.
The Japanese government has started work on a supplementary budget for fiscal 2026 to deal with price rises linked to the situation surrounding Iran.
It aims to submit the extra budget bill before the current Diet session ends on July 17.
Takaichi indicated that the government would also consider extending subsidies to help cover the costs of gasoline and other fuels.
At the end of April, around 980 billion yen was still available in the government’s subsidy funds. However, both ruling and opposition parties are concerned that the money could be exhausted by summer.
“We will work to support the people’s daily lives by compiling a supplementary budget and taking measures regarding electricity, gas and energy,” JIP leader Hirofumi Yoshimura, who is also Osaka governor, told reporters after the meeting.
[Copyright The Jiji Press, Ltd.]
