Japan is facing unprecedented gasoline prices, with the average cost per liter surpassing 190 yen for the first time. In response, the government is set to reinstate gasoline subsidies starting on the 19th, aiming to reduce prices to approximately 170 yen per liter. However, experts caution that while subsidies can alleviate the financial burden on households and businesses, they merely serve as a temporary measure, as oil is also a critical raw material for various chemical products. Thus, the government may not be able to fully mitigate the broader implications of rising costs across multiple sectors.

The concerns are further exacerbated by Japan's heavy reliance on imported crude oil, especially from the Middle East, which accounts for over 90% of its supply. If the availability of this oil were to decrease, the resultant supply-demand imbalance would likely trigger further price hikes, creating a paradox where policies to stimulate demand may contradict the realities of declining supply. This tension was highlighted by a member of the ruling Liberal Democratic Party, who emphasized the contradiction in trying to increase demand while simultaneously facing diminishing supply.

Finance Minister Satsuki Katayama indicated that to keep gasoline prices at 170 yen per liter, approximately 300 billion yen in subsidies per month would be necessary. Should the situation require it, the government is prepared to utilize its reserve fund, which currently stands at 8.6 trillion yen, to continue these price-reduction measures. Since the initiation of the gasoline subsidy in January 2022 following the pandemic, the total budget has exceeded 8 trillion yen. However, if the price surge persists, the government will eventually face financial constraints in its ability to respond effectively.