Press Conference by Minister Saito (Excerpt)

*Note: This is a provisional translation for reference purposes only.

4:54 to 5:03 p.m.
Friday, June 28, 2024
Press Conference Room, METI Main Building

Opening Remarks

Regarding measures to mitigate the burden of fuel oil, electricity, and gas prices that the prime minister announced at a press conference on Friday last week, I will explain the policy based on coordination with the ruling parties.
While the price levels have remained high due to the yen’s further depreciation, among other factors, there have been many voices of concern over the extreme heat expected this summer. In order to protect the people, who have been put in a difficult situation as they have been directly hit by high prices, and to overcome an extremely hot summer, we have decided to provide fuel oil, electricity and gas price subsidies as immediately effective measures.
On the other hand, the subsidies are not policy measures that should be maintained permanently if their effects on the decarbonization trend and the Green Transformation (GX) initiative are taken into account.
Therefore, giving due consideration to the recommendations received from the ruling parties, we will maintain the fuel oil price subsidy as a temporary measure until the end of the year while bearing in mind its adequate effects on consumer prices over that period. In light of the international decarbonization trend, we will take necessary actions to terminate the measure gradually and smoothly after carefully examining the situation. As for electricity and gas prices, subsidies will be provided for three months starting with the charges for use in August. From the viewpoint of overcoming the extreme heat this summer, placing emphasis particularly on reducing the burden in August and September, we have set the subsidy level for low-voltage electricity at 4 yen per kilowatt hour in August and September and 2.5 yen in October.
In addition, I understand that the prime minister has expressed an intention to carefully implement measures to provide additional benefits to households dependent on pensions and low-income households and expand priority support local grants as part of an economic package that the government aims to prepare in the autumn.
Regarding detailed information, the administrative staff will give you a briefing later. I will end my remarks here.

Question-and-Answer Session

Q: The government maintained the electricity and gas price subsidies as energy price mitigation measures but terminated them effective with the subsidies for May because fuel import prices fell to and became stable at the levels before the Ukraine crisis. Looking at fuel import prices for the past several months, their levels have stayed low. Please tell me about your views on the meaning of reinstating the subsidies in this situation and on whether or not it is appropriate to use taxpayer’s money to provide those subsidies.

A: First, we maintained the electricity and gas price mitigation measures until the end of May in light of the fact that fuel import prices fell to similar levels to the ones before Russia’s aggression against Ukraine. We believe that the situation has remained unchanged.
On the other hand, there have been many calls for the need to protect the people against high prices and many voices of concern over the extreme heat. Under these circumstances, we have decided to implement the measures based on the judgment that the subsidies are useful for helping overcome the extreme heat expected this summer and necessary as immediately effective measures. Therefore, I would like you to understand that this is not a reinstatement of the previous measures.