Japan LDP Official Says Gasoline Subsidies Are Not Sustainable

Mikio Kobayashi, chairman of the Liberal Democratic Party's Policy Research Council, said the government's gasoline subsidies are not sustainable and require review ^[1].

The shift in stance signals a potential increase in fuel costs for Japanese consumers. If the government reduces its financial support, the price of gasoline at the pump will likely rise, impacting transportation costs and inflation across the country.

During a press conference on Thursday, Kobayashi said that maintaining the current support level is not realistic. He said that continuing to support a price level of approximately 170 yen per liter ^[2] without any review is not sustainable ^[1].

Currently, the government provides a subsidy of approximately 42 yen per liter ^[1] to keep fuel prices stable. This financial intervention has come at a significant cost to the national treasury. In March 2026, the total amount for gasoline subsidies reached approximately 180 billion yen ^[3].

As of May 22, the national average price for regular gasoline stands at 169.5 yen per liter ^[4]. Kobayashi said that gasoline prices in Japan are already at the lowest level among developed nations ^[1]. He said that the government intends to respond appropriately while considering various circumstances ^[1].

Kobayashi's comments highlight a growing tension between the need to protect citizens from sudden price hikes and the necessity of fiscal discipline. The LDP's policy research arm is now weighing whether the immediate benefit of low fuel prices outweighs the long-term burden on the state budget.