Japan considering extending gasoline subsidies to year-end - sources

investing.com:

By Yoshifumi Takemoto

TOKYO (Reuters) — Japan's government is considering extending until year-end fuel subsidies to keep gasoline prices below 180 yen a litre and is working on a separate budget to finance this measure, three people with direct knowledge of the matter said on Tuesday.

The sources, who declined to be identified because they were not authorised to speak to the media, said details of the proposal were being discussed by officials from the ruling Liberal Democratic Party (LDP) and its ally Komeito.

Finance Minister Shunichi Suzuki declined to comment about the proposal. «We must achieve the both aim of reviving the economy and restoring public finances,» he told reporters.

Last week, Prime Minister Fumio Kishida instructed ruling party officials to consider steps to extend the fuel subsidies which were introduced in January 2022 to help ease cost of living pressures.

Toshimitsu Motegi, the secretary general of the LDP also told reporters the party was seeking to implement an extra budget in autumn to finance any extension.

Gasoline prices have been rising steadily in Japan due to the weaker yen and higher global prices.

Extending the subsidies would make it difficult for the government to achieve Kishida's aim of bringing the primary budget balance, which excludes new bond sales and debt servicing costs, into the black by the fiscal year ending March 2026.

The government has said that it could achieve a primary budget surplus by the following fiscal year, with a deficit of 1.3 trillion yen in the target year.