Takaichi Briefs on Emergency Fuel Measures Amid Middle East Tensions
Overview
Prime Minister Takaichi said she would instruct the Minister of Economy, Trade and Industry to flexibly review how to provide emergency relief for fuel prices in light of the situation in the Middle East. The review will cover the per-unit subsidy and how the measures should end, taking into account proposals from political parties, effects on prices and the economy, crude oil prices, and the use of the fund. She did not set a deadline for a conclusion, but called for the review to proceed as quickly as possible. She also said she would direct coordination with the Finance Minister to secure sufficient funding for support in the near term. The Prime Minister said subsidies had helped curb price increases and had helped restrain prices affecting people's daily lives by supporting transportation and industry costs.
Key points
- She will instruct the Minister of Economy, Trade and Industry to review support and coordinate with the Finance Minister to secure near-term funding.
- The review will be flexible, including the subsidy rate and how the measures should end; nothing has been decided yet.
- She set no deadline for the review's outcome and called for it to proceed as quickly as possible.
- The Prime Minister said fuel subsidies had made a major contribution to curbing price increases.
Overview
Regarding emergency measures to ease fuel price volatility in light of the situation in the Middle East, political parties raised concerns about the fiscal burden and called for a phased review and an exit strategy.
The Prime Minister said she would monitor the effects of the situation in the Middle East on future prices and the economy, and review future support in light of proposals from political parties.
Impact
The Prime Minister said fuel prices in Japan were overwhelmingly lower than in European countries and that subsidies had helped curb price increases.
She said subsidies had helped restrain prices affecting people's daily lives by supporting transportation costs and costs across various industries.
Details
The fuels covered include gasoline, diesel, heavy fuel oil, and kerosene; the Prime Minister said subsidies also apply to diesel, heavy fuel oil, and kerosene.
To secure the fund size needed for near-term fuel support, she will instruct the Minister of Economy, Trade and Industry to coordinate with the Finance Minister as necessary.
The review will take account of current crude oil prices and fund disbursements. The Prime Minister said that forecasting crude oil prices and spending was difficult because the situation in the Middle East was uncertain.
The Prime Minister explained that the instruction would not mean support changes suddenly starting the following month. On reports of a reduction from November and an average monthly increase of about 5 yen, she avoided prejudging whether the review would be based on the ruling parties' proposal or start from a blank slate.