The Japanese government decided Thursday to continue its subsidy program for oil wholesalers in May and further raise the payment from the current 25 yen (20 cents) per liter to prevent a sharp increase in fuel prices as oil supply concerns persist due to a cut in Russian oil exports, sources familiar with the matter said.
The ruling Liberal Democratic Party and its junior coalition partner Komeito proposed to Prime Minister Fumio Kishida that the government continue subsidizing wholesalers. Details will be finalized in late April, the sources said.
The subsidy program is slated to finish at the end of April. Crude oil prices remain high as Western countries shun Russian oil and gas, while other oil-producing nations find it difficult to boost output to replace lost shipments from Russia.
The government will use part of the 5.5 trillion yen reserve fund from the fiscal 2022 budget to finance the subsidy program and other measures to cushion the impact of rising prices on the economy.
The planned relief package will include incentives to boost demand for domestically produced rice and rice flour as prices of imported wheat have been rising due to Russia's invasion of Ukraine and poor harvests in North America.