The Japanese government is considering a supplementary budget of about 3 trillion yen for fiscal 2026 to help households cope with surging energy prices amid prolonged tensions in the Middle East, a source familiar with the matter said Thursday.
The government is considering using around 500 billion yen from reserve funds in the initial fiscal 2026 budget to subsidize utility bills this summer, while it is expected to increase the reserve funds through the extra budget, according to the source.
Prime Minister Sanae Takaichi’s government would also continue subsidies to curb gasoline prices, the source said, but the additional fiscal measures could further fuel concerns about Japan’s fiscal health, the worst among the Group of Seven economies.
With crude oil prices remaining high since the launch of U.S.-Israeli strikes on Iran in late February and the effective closure of the Strait of Hormuz, calls have grown among ruling and opposition parties in Japan for a supplementary budget.
The source said the government is preparing to spend significantly more per household than it did on the subsidies in the July to September period last year.
Japan’s hot summer months tend to lead to greater demand for air conditioning.
Last summer, the average household burden for electricity and gas was reduced by around 1,000 yen per month, with the government using some 288.1 billion yen in reserve funds from the fiscal 2025 budget.
Japan’s subsidies for electricity and gas bills have been implemented intermittently in recent years, mainly in the summer and winter months when demand for cooling and heating rises. The program was first introduced in January 2023 to respond to rising prices due to the Russian invasion of Ukraine.
© KYODO
