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Japan Compiling Plan to Combat Soaring Gas Prices

The government plans to put together additional measures to combat soaring prices for gasoline and other fuel prices by the end of this month.

Prime Minister Fumio Kishida instructed Koichi Hagiuda, chairman of the Liberal Democratic Party’s Policy Research Council, to compile measures when they met at the prime minister’s office in Tokyo on Tuesday.

Kishida also plans to formulate a major stimulus package in September, which will include support for growth industries and measures to counter high prices.

“We will make sure that the public is able to feel the effects of the measures in early September,” the prime minister told reporters after the meeting.

The government will consider measures to keep gasoline prices low, including the continuation of subsidies that are currently given to oil wholesaler after October. The subsidies to oil wholesalers are set to expire at the end of September.

With oil prices having temporarily calmed, the government has begun to reduce subsidies.

However, the national average price of regular gasoline rose to ¥181.9 per liter as of Aug. 14, the highest level in 15 years since August 2008, due mainly to production cuts in oil-producing countries and the weakening of the yen in the foreign exchange market.

Some LDP members have proposed application of the currently frozen “trigger clause,” a provision that allows for a temporary gasoline tax reduction when prices soar to a certain level.

“While taking into account the situation of various prices, I would like to come up with economic measures in September,” Kishida told the reporters.

In addition to supporting growing industries such as semiconductors and encouraging companies to raise wages, the government also plans to study the possibility of continuing to subsidize electricity and city gas after October, according to a senior government official.

The government is preparing to submit a draft supplementary budget for fiscal 2023 to an extraordinary Diet session, which is expected to convene in October.

Source: The Japan News