Japan's finance minister said on October 30 that the cabinet that morning approved a draw of ¥1.148tn from the Middle East situation contingency reserve to fund gasoline support, leaving ¥735.9bn in the reserve. The remarks, at the post-cabinet press conference of the minister, were reported by the Ministry of Finance. This is the ministry's own account of the decision, not a new cabinet action. For the decision itself, see Earlier Tokyo Brief coverage.
Gasoline: a ¥5 monthly step
The minister described the measure as a temporary cushion against sharp price swings. The draw secures the fund size needed for gasoline support for the time being.
The subsidy reference price stays at the current ¥170 in October and November. It rises to ¥175 in December, and the government's thinking is to keep raising it by ¥5 a month toward spring. The reserve draw was sized to cover costs through December on that assumption. The reference price is a policy parameter in the subsidy scheme. The source does not describe it as a retail pump price.
The minister gave her reasons. The subsidy per litre now exceeds ¥50, which she called a record. Public money is going out at more than ¥10bn a day to hold prices down. Lawmakers from both the ruling and opposition parties have called for a phased review and an exit strategy. She said a one-step rise in the reference price would be too large a jump and would hit household life and economic activity. She also noted that a cut in the consumption tax rate on food and drink from April next year is being handled separately as part of continuing cost-of-living measures.
Winter electricity and gas support
Prime Minister Takaichi said the day before that electricity and gas support would start in December and run for three months, December through February, with a guide figure of ¥7,000 for the three months. The minister said the timing was brought forward because the cold sets in from December.
The minister did not give a budget size or funding source for this support, which a reporter had asked about. She said the ministry will coordinate with the Ministry of Economy, Trade and Industry, the requesting agency, in light of the prime minister's remarks. Whether anything continues from March onward is open: the government will reconsider its response then, taking the weather and energy prices into account, which she tied to the Middle East situation.
Other points from the briefing
Asked about the foreign exchange special account surplus, Katayama said the rule of retaining at least 30% of each year's surplus stays as the basic approach. The transfer to the general account is set each year during budget compilation, taking account of the account's finances and the general account's position. She said a transfer above that baseline was made under the Kishida government.
She also said the government has not put forward concrete eligibility conditions for the consumption-tax grant now before the Diet, and that it will keep consulting parties as the bill is deliberated.