JAPAN TODAY


 

The government decided Tuesday to allocate an additional 989.15 billion yen in subsidies to curb energy bills in Japan, largely depleting this fiscal year's reserve fund set aside to combat inflation.

This move brings the total state expenses for measures to address the cost-of-living crisis to more than 11 trillion yen over the past three years, adding pressure to the country's fiscal health.

The additional spending is intended to ease the pain of rising electricity, gas and gasoline prices in the fall when people still tend to use air conditioning often and travel more by car.

Prime Minister Fumio Kishida's government terminated the subsidies for electricity and gas bills in May but decided in June to reinstate them between August and October to support households suffering from higher energy prices.

The government will also maintain its subsidies to oil wholesalers to limit the rise in retail gasoline prices until the end of the year.

As Russia's invasion of Ukraine has sharply raised household energy costs worldwide, Kishida's administration launched a subsidy program for gasoline in 2022, followed by similar measures for electricity and gas the following year.

"Considering its impact on efforts for decarbonization and green transformation as well as financial burden, it is not a policy that should be continued indefinitely," said Finance Minister Shunichi Suzuki.

"It is necessary to consider an exit strategy, taking into account various economic factors, including price developments," Suzuki told a press conference.

Speaking at a governmental panel meeting later Tuesday, Kishida said the government seeks to end those programs "in stages at an early date."

Japan's core consumer prices rose 2.7 percent in July from a year earlier, with the rate of increase expanding for the third straight month as energy costs were pushed up following the termination of government subsidies, according to government data.


© KYODO