TOKYO: Japanese industry minister Koichi Hagiuda said Tuesday that the government will put its new subsidy program aimed at curbing surging gasoline prices into place for the first time.

The average retail price of regular gasoline in Japan looks certain to have reached 170 yen per liter as of Monday, the first such development in about 13 years and four months, meeting the condition for activating the subsidy program. The latest average pump price, set to be announced by the industry ministry Wednesday, is forecast at 170.20 yen.

The move by the government is intended to mitigate the impact of surging gasoline prices on people’s daily lives.

The subsidy program will start Thursday, providing oil wholesalers with 3.4 yen per liter of gasoline, gas oil, kerosene and fuel oil. The industry ministry will investigate retail price levels in terms of whether and to what extent the subsidies are reflected.

“While retail prices vary from region to region, we expect that the subsidies will help prevent a sharp rise in oil prices,” Hagiuda said at a press conference.

The program is activated once regular gasoline prices hit 170 yen, with subsidies of up to 5 yen per liter given to oil distributors to help curb their wholesale prices and prevent a spike in retail prices at gas stations.

The actual level of subsidies is decided on the basis of factors including weekly regular gasoline price data from the ministry and crude oil price developments.

The program will be in place until March. About 80 billion yen has been secured for the program under the government’s supplementary budget for fiscal 2021.

To examine the effects of the subsidies, the ministry will survey prices of oil products at about 32,000 gas stations and other outlets, up sharply from around 3,000 stores at present.

Crude oil prices remain high as the world economy is recovering and major oil-producing countries are cautious about increasing output.

The Japanese government created the subsidy program in December last year in response to spikes in gasoline and kerosene prices.

JIJI Press