TOKYO - Japan is mulling tapping some 500 billion yen ($3.1 billion) in reserve funds to subsidize household electricity and gas bills in the high-demand summer period, a government source said Thursday.
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, as the effective closure of the Strait of Hormuz in the ongoing Middle East crisis is expected to lead to higher utility prices in resource-poor Japan.
The move comes as Prime Minister Sanae Takaichi on Monday instructed her Liberal Democratic Party and junior ruling coalition partner the Japan Innovation Party to craft detailed support measures for electricity and gas bills that would keep utility bills at levels below those of last summer.
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.
