Japanese Prime Minister Sanae Takaichi has outlined a significant initiative to expand subsidies for electricity and gas, responding to rising energy costs and ongoing instability in the Middle East. The government is preparing a supplementary budget of over 3 trillion yen to tackle these challenges. This effort is designed to reduce the burden on households by increasing the relief on electricity and gas bills to approximately 5,000 yen between July and September, compared to the previous year’s 3,000 yen during the same period.
The funding for this utility relief initiative, estimated at around 500 billion yen, will derive from the reserve fund in the fiscal 2026 budget. The plan includes increasing electricity subsidies per kilowatt-hour during the summer, especially in August, when energy demand typically surges. This strategic move is part of a broader effort to maintain economic stability amidst the pressures of high energy prices.
A significant portion of the supplementary budget will also maintain gasoline subsidies currently keeping average fuel prices around 170 yen per liter nationwide. The government aims to sustain this support throughout the summer holiday season, ensuring continued relief for consumers. Additionally, funds will be allocated to replenish reserve accounts used for electricity and gas subsidies and provide financial assistance to local governments for liquefied petroleum gas costs and other energy-related expenditures.
Although the supplementary budget will be financed through additional government bond issuance, Prime Minister Takaichi has assured that these measures are expected to proceed without causing disruptions in financial markets. The administration is also focusing on encouraging energy-saving measures, balancing the need for conservation without implementing strict measures that might hinder economic activity.