Japan's economy, trade and industry ministry (Meti) will begin providing subsidies to the country's oil suppliers from tomorrow to mitigate the impact of soaring oil prices on domestic oil product prices.
The subsidies come as the country's average gasoline retail prices increased to ¥170.20/litre on 24 January, exceeding ¥170/l for the first time since September 2008, according to Meti data released today.
The subsidies will be provided until the end of March to 29 companies, including Japanese refiners and oil product importers such as trading houses, to mitigate sharp rises in gasoline, diesel, kerosine and fuel oil prices. Japan has allocated ¥80bn ($700.7mn) for this, as part of a total funding of ¥55.7 trillion for its Covid-19 economic measure.
Tokyo initially said in November that it planned to provide subsidies when the country's average gasoline retail prices exceeded ¥170/l ($237/bl), with a maximum funding of ¥5/l. A subsidy of ¥3.40/l will be provided until 2 February, with the subsequent amount dependent on wholesale crude and gasoline wholesale prices.
"This is not aiming to lower oil prices but to support the country's industry sectors and household consumers, as well as to get used to the higher oil prices because of recent stronger crude values," Meti previously said.
The subsidy will be provided only when the reference price meets the conditions and Meti will increase the reference rice by ¥1/l every four weeks.
