In response to escalating energy costs and ongoing instability in the Middle East, Japanese Prime Minister Sanae Takaichi has revealed plans to enhance electricity and gas subsidies for households. The government is set to introduce a supplementary budget that will surpass 3 trillion yen, aiming to alleviate the financial burden on citizens. The enhanced subsidy plan will lower electricity and gas bills for an average household by about 5,000 yen between July and September, an increase from the previous year’s relief of around 3,000 yen for the same period.
The relief initiative, which is expected to cost approximately 500 billion yen, will be financed through the reserve fund in the fiscal 2026 budget. A key feature of the plan involves raising electricity subsidies per kilowatt-hour during the summer months, with a peak in August when energy consumption is typically at its highest. Takaichi has also confirmed that the government is in the process of drafting a supplementary budget worth over 3 trillion yen to tackle the economic repercussions of prolonged Middle Eastern instability and to bolster energy-related initiatives.
A substantial portion of this additional budget is earmarked to sustain gasoline subsidies, which have been instrumental in maintaining the average fuel price at around 170 yen per liter nationwide. The authorities plan to extend this support throughout the summer holiday period. Furthermore, the budget will allocate funds to replenish reserve accounts used for electricity and gas subsidies and provide financial assistance to local governments for covering liquefied petroleum gas costs and other energy-related expenditures.
Despite the plan being funded through the issuance of additional government bonds, Takaichi assured that the administration is confident the measures will not disrupt financial markets. Alongside financial relief, the government is also aiming to promote energy-saving practices, though it intends to avoid imposing strict conservation measures that might hinder economic activity.