Japan plans to gradually reduce gasoline subsidies starting from December, as fiscal funds are getting tight.

(1) According to ruling party insiders, the Japanese government plans to lower gasoline subsidy amounts as early as December. This subsidy was introduced in March this year to offset surging oil prices caused by turmoil in the Middle East. (2) With crude oil prices remaining high, monthly fiscal subsidy spending has reached several billion dollars, and the 3.3 trillion yen supplementary budget approved in June is being rapidly depleted. The subsidy phase-out plan: In December, the national retail price of gasoline will rise to 177 yen per liter, and in January of the following year, it will be further raised to 183 yen per liter. (3) The timing of the policy adjustments will be coordinated with the reduction of the food and beverage consumption tax in April of next year, aiming to mitigate the impact of rising oil prices on people's livelihoods. Meanwhile, the government is studying the restart of gas and electricity subsidies, due to expire in September, to stabilize household energy expenditures. (4) The Prime Minister has instructed the Minister of Economy, Trade and Industry to reassess the subsidy plan, taking into account international oil price trends and the pace of subsidy fund consumption, to determine the specific timetable for subsidy reduction.