Japan’s Prime Minister Takaichi Sanae has said the government plans to ask for a fiscal 2026 supplementary budget to help fight surging energy prices. She said she hopes to submit a draft budget totaling over 3 trillion yen, or 18.8 billion dollars, to the Diet as early as next week.
Takaichi was speaking to reporters on Monday about how the government will respond to the consequences of the situation in the Middle East.
She said she wants subsidies on gas and electricity bills from July to September this year, worth around 3.14 billion dollars, to be funded by reserves included in this fiscal year’s budget. She added that the Cabinet will decide on the matter at a meeting on Tuesday.
She also said the government will set up a reserve fund for responding to the situation in the Middle East so that it can continue measures such as capping retail gasoline prices.
Funding the extra budget would require additional issuance of deficit-covering bonds. But Takaichi said the government will be able to deal with the matter without increasing the total amount of the bond issuance, and that the current plan will not affect the bond market and is therefore feasible. She said this is because last fiscal year’s amount of bond issuance is expected to be 18.8 billion dollars lower than planned thanks in part to higher tax revenue.
Takaichi said the government should be able to secure enough oil to last through next spring because a higher percentage of oil will be imported to Japan by routes other than the Strait of Hormuz.
The government’s previous estimate was enough oil beyond the end of this year.
Takaichi also said the government will not make a stronger request than usual for energy-saving this summer. She said the government is not at the stage of asking people to save energy in a way that puts a brake on economic activities at this point.