Japan’s Prime Minister Sanae Takaichi has unveiled a plan to bolster subsidies for electricity and gas, aiming to alleviate the pressure of rising energy costs on households amid ongoing instability in the Middle East. The plan involves crafting a supplementary budget that will exceed 3 trillion yen, with a significant portion dedicated to energy-related relief efforts.
This initiative seeks to cut electricity and gas bills by approximately 5,000 yen for the average household from July through September. This marks an increase from last year’s support, which offered a reduction of roughly 3,000 yen during the same timeframe. The funding, estimated at 500 billion yen, will be sourced from the reserve fund of the fiscal 2026 budget, enhancing electricity subsidies per kilowatt-hour during the summer peak usage months, particularly in August.
Aside from the household utility subsidies, a substantial part of the supplementary budget will ensure the continuation of gasoline subsidies. These subsidies are crucial in maintaining average fuel prices at about 170 yen per liter across the nation, a strategic move to support consumers through the summer holiday period. Additionally, the budget will allocate resources to replenish reserve accounts previously used for energy subsidies and provide financial aid to local governments for liquefied petroleum gas costs and other energy expenditures.
The Japanese government plans to fund these measures through the issuance of additional government bonds. Prime Minister Takaichi has expressed confidence that these financial strategies will not disrupt the financial markets. In tandem with these subsidies, the administration aims to promote energy-saving practices, though it intends to avoid any stringent conservation measures that might hamper economic growth.