Japanese Prime Minister Sanae Takaichi has unveiled a plan to expand subsidies for electricity and gas for households as part of a new fiscal strategy to combat rising energy prices and geopolitical instability in the Middle East. The government is gearing up for a substantial supplementary budget exceeding 3 trillion yen to implement these measures, with a focus on relieving the economic burden on citizens.
The updated subsidy program is set to provide an average household with a reduction of about 5,000 yen in electricity and gas bills during the months of July through September. This represents an increase from the previous year’s support, which offered around 3,000 yen in relief over the same period. The funding for this utility relief initiative, estimated at approximately 500 billion yen, will be sourced from the reserve fund within the fiscal 2026 budget.
A significant aspect of the plan involves enhancing electricity subsidies on a per kilowatt-hour basis throughout the summer, particularly in August when energy consumption typically reaches its peak. Additionally, Prime Minister Takaichi confirmed that the supplementary budget, exceeding 3 trillion yen, is designed to mitigate the economic fallout from ongoing Middle East tensions and to bolster energy-related strategies.
An essential part of this additional budget will focus on maintaining gasoline subsidies, which currently help keep average fuel prices around 170 yen per liter across the nation. The government aims to sustain this support through the busy summer holiday period. The supplementary budget will also allocate funds to replenish reserve accounts used for these subsidies and provide financial aid to local governments to manage liquefied petroleum gas costs and other energy-related expenditures.
Though the financial package will necessitate the issuance of additional government bonds, Prime Minister Takaichi assured that these measures are designed to proceed without causing disruption in financial markets. The government also intends to promote energy-saving initiatives, balancing the need to avoid stringent conservation mandates that might hinder economic growth.