Press Conference by the Prime Minister on the Measures to Address Fuel Oil Prices and Other Matters

August 22, 2023

[Provisional translation]


[Initial remarks]
A short while ago today, I instructed Mr. Hagiuda, LDP Policy Research Council Chairperson, to urgently consider measures to deal with fuel oil prices, including those of gasoline, as the first phase of efforts to address rising commodity prices, and to propose by the end of this month a certain direction of the ruling party. I also made a similar request to Mr. Takagi, Policy Research Council Chair of Komeito Party.
As to why we urgently work again on measures to deal with gasoline and other fuel oil prices, let me note that the Kishida Cabinet has promised to protect the lives of the people against rising commodity prices caused by the aggression against Ukraine and other factors. In particular, in order to protect the lives of the people and livelihoods of small and medium-sized enterprises from a sudden surge in fuel oil prices, such as those of gasoline and kerosene, we have been taking unprecedentedly bold measures to mitigate drastic changes in fuel oil prices since the end of January 2022.
We have so far spent a total budget of 6.2 trillion yen for these measures to mitigate drastic changes in fuel oil prices, which have produced great results. For example, in June last year, while imported crude oil prices rose to the level of 216 yen per liter of gasoline, the retail prices were curbed to 174 yen per liter by introducing a subsidy worth more than 41 yen per liter.
Some people pointed out that, from the perspective of promoting decarbonization, these measures would help expand fossil fuel consumption. Others insisted that such spending of fiscal funds should be immediately halted once price increases have stabilized. Given such opinions, and with the unprecedented sudden surge in gasoline prices, the Kishida administration adopted the policy of first focusing on the protection of the lives of the people by introducing measures to mitigate drastic changes, and then gradually decreasing the level of subsidies while assessing the effect of these measures and ensuring to minimize the impact on livelihoods.
As imported crude oil prices have been on a downward trend for the six-month period from the end of last year until June this year, we have gradually reduced the subsidy level under the mitigation program. However, with the voluntary production cuts by oil-producing countries intensifying this summer, combined with the exchange rate trends, gasoline retail prices are now approaching a record high of 185 yen per liter.
This summer, I myself visited various sites and heard firsthand the voices of those who struggle to cope with the steep rise in gasoline and other fuel oil prices. Under such circumstances, we have determined that it is necessary to urgently work on measures to address fuel oil prices. The Government will vigorously work with the ruling parties to come up with a concrete plan by the end of the month so that the effect of the measures will be felt among the people by early September.
(On media reports suggesting that the subsidy program to address gasoline prices is to be extended and that relevant ministries and agencies will be instructed accordingly before the end of the week)
As I said earlier, I have asked the ruling parties to urgently study measures to address fuel oil prices. I instructed them to urgently consider their content, period, method, amount, etc. before the end of the month. I have given instructions today so that the ruling parties will consider this in their capacity and, in coordination with the Government, come up with measures.
(On the extension of the subsidy program for electricity and gas)
As you pointed out, current measures to address electricity and gas rates expire at the end of September, and with that in mind, we plan to come up with economic measures in September while also assessing other factors such as the prices of other commodities. More precisely, we will assess in advance measures to address drastic changes in gasoline and other fuel oil prices by the end of the month, before actively discussing all economic measures toward next month.
(On telephone consultations and other responses among the Japan-U.S.-ROK leaders regarding the notification that North Korea plans to launch a ‘satellite’)
First of all, I would like to refrain from commenting based on speculation regarding diplomatic responses in the event that North Korea launches a satellite. But in any case, even if its purpose is to launch a satellite, any launch using ballistic missile technology violates relevant Security Council resolutions and is a grave issue that greatly affects the security of the Japanese people. It is only natural that Japan should work closely together with the United States, as well as within the Japan-U.S.-ROK framework, while making every effort to gather intelligence and conduct warning and surveillance.


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