Japan Weighs Cuts to Gasoline Subsidies From December as Energy Costs Strain Budget

Japan may begin scaling back its retail gasoline subsidies from December as the payments become difficult to sustain, Reuters reported, citing unnamed ruling-party sources. The subsidies, introduced in March after the Middle East war began, cost Tokyo several billion dollars a month and aim to hold the national average price at $1.09 per liter. Under plans under discussion, the scale-back could lift the national average to $1.11 per liter in December and $1.15 per liter in January. The government is also considering a food and beverage tax cut effective April next year to cushion the blow. "Once the consumption tax cut begins, households will feel less financial pressure," one official said. The subsidies are draining a roughly $19 billion supplementary budget approved in May. Japan remains among the countries most exposed to the war's fallout given its lack of domestic energy resources and heavy dependence on Persian Gulf imports.