Japan eyeing fresh stimulus package to weather surging fuel prices -Kyodo

March 16, 2022

TOKYO (Reuters) – Japan is considering compiling a fresh economic stimulus package centred on easing the pain from high energy costs, which are expected to persist given the conflict in Ukraine, Kyodo news agency reported on Wednesday.

The package, to be compiled after the fiscal 2022 budget passes parliament, would include the extension of temporary subsidies given to energy wholesalers that expire at the end of this month, Kyodo said.

A day earlier, ruling coalition lawmakers had called for more spending to cushion the economic blow from the Ukraine crisis, which has hit households and retailers by driving up already-rising energy and food prices.

The ruling coalition, together with the centre-right opposition Democratic Party for the People (DPFP), agreed on Wednesday to look into unfreezing a “trigger clause” that removes the gasoline tax when the price of the fuel exceeds 160 yen ($1.35) for more than three months, DPFP Secretary General Kazuya Shimba told reporters.

That clause had been frozen in 2011 to secure funds to rebuild after a devastating earthquake and tsunami.

Instead, the government in January launched the temporary programme to subsidise gasoline prices above the threshold of 170 yen per litre. On Wednesday, it lifted that subsidy to the upper limit of 25 yen for the coming week after gasoline prices rose for a 10th straight week.

($1 = 118.1900 yen)

(Reporting by Leika Kihara, Kantaro Komiya and Yoshifumi Takemoto; Editing by Chang-Ran Kim and Gerry Doyle)