Takaichi signals review of fuel subsidies as budget vote nears
Japan's prime minister says gasoline aid may be reconsidered, while rejecting naphtha controls and urging lawmakers to focus on a food tax cut.
- Japanese Prime Minister Sanae Takaichi has indicated the government may scale back fuel subsidies.
- The current subsidies are designed to keep gasoline prices at approximately 170 yen per litre.
- The potential policy review was announced during deliberations for a supplementary budget that is expected to pass the Lower House.
Japanese Prime Minister Sanae Takaichi indicated on Thursday (June 4) that her government could scale back subsidies designed to keep gasoline prices at about 170 yen per litre.
Speaking during House of Representatives Budget Committee deliberations on the government’s draft supplementary budget for fiscal 2026, Takaichi said, “We will flexibly consider the matter, including gas prices.”
Junya Ogawa, leader of the opposition Centrist Reform Alliance, pressed the government to look at public intervention in managing naphtha distribution.
Naphtha is a key raw material for oil-related products, and concerns have been rising over possible supply disruptions.
Takaichi pushed back against that proposal, saying Japan had “secured the necessary amount of naphtha” overall.
“As of this moment, we are not thinking of introducing restrictive measures,” she added.
On the proposed two-year consumption tax reduction for food, Takaichi declined to give specifics, saying the multiparty National Council on Social Security was still discussing both the tax rate and the timing of the measure.
“I won't jump to conclusions,” she said, while urging lawmakers to concentrate on how to make the tax cut happen rather than looking for reasons not to introduce it.
The 3,113.5-billion-yen supplementary budget draft, mainly aimed at creating new reserve funds for measures linked to Middle East tensions, is expected to pass the Lower House Budget Committee by a majority vote later Thursday.
It has the backing of the ruling Liberal Democratic Party and its coalition partner, the Japan Innovation Party.
The opposition Democratic Party for the People is also considering supporting the extra budget.
Once approved by the committee, the draft budget is expected to be put to a plenary vote and clear the full House of Representatives later the same day.
