Japan government approves $3.2B yen use from reserve fund for energy bill subsidy

The Japanese government decided Tuesday to use 513.5 billion yen ($3.2 billion) from reserve funds for the current fiscal year to resume subsidies for energy bills during the summer to ease the impact of the conflict in the Middle East, News.Az reports, citing Kyodo.

The subsidies will cover electricity and gas bills during the July-September period, when demand for air conditioning increases, resulting in a reduction of about 5,000 yen for an average household. The government said the subsidies will help keep bills below last summer's levels.

"We focused on reducing the burden in August, when electricity usage peaks," Ryosei Akazawa, minister of economy, trade and industry, told a press conference, where he showed energy-saving measures for household appliances and cars.

The government will provide aid of 3.5 yen per kilowatt-hour of electricity in July and September and 4.5 yen in August by tapping the 1 trillion yen reserve funds booked in the initial fiscal 2026 budget.

For gas, it will offer support of 14 yen per 1 cubic meter in July and September and 18 yen in August.

The subsidy program will also alleviate electricity bill burdens for small and medium-sized companies.

Japan has implemented subsidies for electricity and gas bills on and off in recent years, primarily during the summer and winter months when demand for cooling and heating increases, with the most recent subsidies offered from January to March.

The program was first introduced in January 2023 in response to rising prices caused by the Russian invasion of Ukraine and has since used funds totaling 5.6 trillion yen, including the latest approved Tuesday.

To offset the loss of more than 500 billion yen and restore the reserve funds, which are typically set aside for natural disasters and other emergencies, to 1 trillion yen, the government plans to submit a draft supplementary budget worth over 3 trillion yen.

The ruling Liberal Democratic Party's Diet affairs chief Hiroshi Kajiyama said he told his counterpart at the opposition Centrist Reform Alliance that the draft supplementary budget is expected to be submitted "around the middle of next week."

The additional budget will allocate reserve funds to address the impact of the situation in the Middle East. The funds are expected to finance a new subsidy program that will maintain gasoline prices at 170 yen per liter, a program which was resumed in mid-March.

News.Az 

By Nijat Babayev