Japan is considering extending its subsidy program for oil wholesales to lower retail gasoline prices beyond its current year-end deadline to next spring, intending to prevent a sharp hike in fuel costs amid persistent supply concerns triggered by Russia's invasion of Ukraine, sources familiar with the situation said Saturday.
The government plans to set aside more than 1 trillion yen from the envisaged fiscal 2022 second supplementary budget that will finance an economic stimulus package to be finalized in October, the sources said.
Subsidies to curb the impact of a surge in gasoline and other fuel prices began in late January to keep the average retail price of gasoline to 168 yen per liter.
The country's average retail price for regular gasoline has recently been kept at around 170 yen per liter.
Most recently, the government decided in early September to extend its subsidy program beyond its deadline at the end of December. If the subsidies are extended beyond next year, it would be the fourth such extension.
The current subsidy program also aims to keep the prices of diesel oil and kerosene from rising sharply.
With the seven-month-old Russian war against Ukraine showing no signs of abating, crude oil prices continue to be high as Western countries shun Russian oil and gas.