Japan unveils oil subsidy details

Japan's trade and industry ministry Meti has disclosed details to subsidies for the country's refiners to mitigate soaring prices of domestic oil products, as part of its economic recovery measures from the Covid-19 pandemic.

Meti plans to cap further rises in prices for gasoline, diesel, kerosine and fuel oil, by providing subsidies to refiners and importers of such products. This is aimed at supporting the country's industries such as transportation, agriculture and fishery sectors that use relatively high amount of refined fuels and household consumers.

Tokyo plans to disburse subsidies when the country's average gasoline retail prices exceed ¥170/litre ($236.95/bl), with a maximum funding of ¥5/l, from late December to March next year. The reference price for other products will be the levels of those prices when gasoline hits ¥170/l. Gasoline retail prices averaged ¥168.9/l as of 15 November.

Meti will increase the reference price by ¥1/l each month, from ¥170/l for gasoline and respective prices for other products, to get consumers used to higher values as funding is simply a mitigation measure. This is part of Japan's total funding of ¥55.7 trillion for its Covid economic measures.

By Motoko Hasegawa