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Gov’t poised to raise cap on gasoline subsidy by 10 yen

  • April 22, 2022
  • , Tokyo Shimbun , p. 2
  • JMH Translation

To curb skyrocketing prices for gasoline and other fuels, the government has finalized a plan to continue its subsidy program for oil wholesalers past May and to raise the cap on the subsidy from the current 25 yen per liter to 35 yen, sources revealed on April 21. The aim is to effectively lower the national average retail price for regular gasoline by revising the threshold for providing the subsidy from 172 yen per liter to 168 yen. The program is set to continue through September. 


If gas prices rise dramatically and the 35 yen is insufficient, an additional subsidy equivalent to half of the amount in excess of the threshold figure will be added. Measures to hold down fuel prices constitute one of the pillars in the emergency economic package being crafted to address the rise in commodity prices. The government plans to announce the measures on April 26.


The government calculated the amount of subsidy needed to keep prices at the threshold by forecasting gasoline prices based on trends in crude oil prices and exchange rates. The highest price forecast after the program started in January was on the 203 yen level and so the government intends to raise the ceiling to 35 yen, the difference between the forecast price and the threshold price. The subsidy will be applied to aviation fuel, in addition to the fuels currently covered by the subsidy program, namely, gasoline, kerosene, diesel, and fuel oil. Fiscal 2022 government budget reserves will be used to finance the subsidy in May. A new supplementary budget will be compiled to cover the subsidy for the June–September period.

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