LDP Approves Extension of Gasoline Subsidy

Jiji Press

11:41 JST, August 30, 2023

TOKYO (Jiji Press) — The ruling Liberal Democratic Party on Tuesday broadly approved a proposal to extend to year-end a gasoline subsidy currently set to expire at the end of September.

The LDP also agreed in principle to expand the program that pays subsidies to oil wholesalers to curb retail fuel price rises.

The LDP will work out further details as it aims to lower the average retail price of regular gasoline, currently nearing the record high of ¥185.1 per liter, to below ¥180.

Since June, the government has gradually reduced the subsidy rate, which stands at 30%, to terminate the program at the end of September, saying that the crude oil market regained calm.

Gasoline prices, however, spiked recently as crude oil prices rose and the yen weakened against the dollar.

The average retail price of regular gasoline as of Aug. 21 climbed for the 14th consecutive week to ¥183.7, although the subsidies pushed down the national average by ¥12, including the effects of additional subsidies invoked when the average reaches a preset level.

The LDP’s proposal also calls for continuation of a program to curb electricity and gas costs, also set to expire at the end of September.