Japanese Prime Minister Takaichi Sanae stated on Monday that the government is considering compiling a supplementary budget for the 2026 fiscal year, influenced by rising international crude oil prices due to conflicts in the Middle East. Since mid-March, the Japanese government has utilized reserves from the 2025 fiscal year to provide subsidies to oil wholesalers to curb sharp increases in gasoline prices. However, these funds are now nearly exhausted. Should policies to subsidize public fuel, electricity, and gas costs be reinstated this summer, the government will need to secure additional financing. The government initially planned to use a 1 trillion yen (approximately $6.3 billion) reserve from the 2026 fiscal year for economic relief measures, but this amount may prove insufficient to meet actual needs. Critics argue that such reserve funds should be preserved specifically for responding to unforeseen emergencies like natural disasters. Typically, Japan finalizes supplementary budgets in the autumn of the current fiscal year or later. Previously, Japan allocated over 1 trillion yen from the 2025 fiscal year budget and reserves for oil price subsidies. By the end of April, only about 980 billion yen remained. To stabilize gasoline retail prices around 170 yen per liter, Japan requires monthly subsidies amounting to hundreds of billions of yen. Several economists estimate that the existing subsidy funds will be completely depleted by the end of June.
Comments