The Japanese government started Thursday a revamped gasoline subsidy designed to cut prices by 10 yen ($0.07) per liter to help ease cost-of-living pressures for consumers ahead of an upcoming parliamentary election.
Under the previous scheme introduced in January 2022, the government had subsidized wholesalers to keep regular gasoline prices at around 185 yen per liter, but will now provide a fixed sum regardless of prices, which have recently dropped below that benchmark.
The government subsidy aims to reduce the wholesale gasoline price by 7.40 yen per liter in the first week, a targeted 5 yen effective decrease from a week earlier when crude price fluctuations are taken into account. It then aims to reduce the price by at least 1 yen weekly until it is 10 yen lower by mid-June.
Price reductions are expected to flow through to gas stations in two to three weeks, taking into account inventories, it said.
No end date has been decided for the program, but with around 1 trillion yen allocated to the subsidies, they could last until the end of March 2026.
The reintroduction of the subsidies comes ahead of the House of Councillors election slated for the summer.
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AloJapan.com