Japan maintains oil subsidies until 2024

The Japanese government will extend domestic oil product subsidies until spring next year to offset the impact of rising energy prices.

According to the country’s prime minister, Fumio Kishida, the government would continue subsidies for gasoline, gasoil, kerosene, and fuel oil.

When the government releases its entire economic stimulus program, it is likely to offer further information, including the precise timing of the subsidies.

According to Kishida, the subsidies have been prolonged because the domestic economy is undergoing significant inflation without commensurate wage rises.

In September, the administration extended the subsidy term to the end of December.

Fuel consumption will rise as winter approaches, said Yasutoshi Nishimura, minister of commerce and industry.

“Without the subsidy, the gasoline price may surpass $200/liter ($212/bl),” Nishimura said, noting that the subsidy had maintained the price at $175/liter.

Last week, the minister expressed worry that the “oil price is in an underlying rising trend” as a result of the Hamas-Israel conflict and voluntary oil production cuts by some Opec+ members.

However, Nishimura emphasized the significance of having an exit strategy because the subsidies demand a few trillion yen in public spending.

“The country’s economy must be transformed into a more “energy crisis-resilient structure,” Nishimura said.