Japan is considering using about 500 billion yen ($4.5 billion) from its reserve fund to provide subsidies for electricity and household gas bills during the peak summer energy demand period.
A source said on Thursday, May 21, that the government is preparing a larger subsidy per household than in the July-September period last year.
This was done because the de facto blockade of the Strait of Hormuz in the midst of the Middle East crisis is expected to push up the price of electricity and gas in Japan, which has few energy resources.
The move comes after Prime Minister Sanae Takaichi on Monday instructed the Liberal Democratic Party (LDP) and its junior coalition partner, the Japan Innovation Party, to draw up detailed support measures related to electricity and gas bills.
The policy aims to keep utility costs below last summer's level.
Summers in Japan usually increase demand for air conditioning.
Last summer, the burden of household electricity and gas bills was reduced by about 1,000 yen per month. At that time, the government used about 288.1 billion yen from the fiscal 2025 budget reserve fund.
Electricity and gas subsidies in Japan have been applied periodically in recent years, especially in summer and winter when demand for cooling and heating increases.
The program was first introduced in January 2023 in response to rising prices due to Russia's invasion of Ukraine.
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