Japan to Raise Oil Subsidy Cap to Slow Price Rise

Politics Economy

Tokyo, Feb. 25 (Jiji Press)--The Japanese government will substantially raise the cap on its subsidies paid to oil wholesalers to help slow the pace of rises in gasoline and other fuel prices, following Russia's launch of full-scale invasion of Ukraine, industry minister Koichi Hagiuda said Friday.

The government is mainly considering an option of raising the ceiling to around 25 yen per liter from the current 5 yen by tapping into reserve funds under its budget for fiscal 2021, which ends next month.

At a press conference, the minister also said that the government will additionally release oil from its state reserves and ask for hikes in oil and gas production to ensure stable supplies.

International crude oil prices are surging due to concerns over the possibility of the disruption of crude oil and gas supplies from Russia lasting for a long period. On the New York Mercantile Exchange on Thursday, key West Texas Intermediate crude oil futures briefly rose above 100 dollars per barrel for the first time in seven years and seven months.

On the subsidy scheme, Hagiuda stressed the government's eagerness to "expand the support and consider an appropriate size (of hike in the aid) to help people engage in (sufficient) economic activities" and to minimize the impact of the surging gasoline prices on their livelihoods.

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