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Japan considering

moves to keep fuel

prices under control

POLICY THE Japanese government is considering new
measures to prevent rising fuel prices across the
country from getting out of control.
Minister of Economy, Trade and Industry
(METI) Koichi Hagiuda has indicated a desire
to take steps to limit the impact felt by the general
population as oil prices remain high and in some
sectors are starting to show signs of affecting eco-
nomic activities.
Having only been in the post since last Octo-
ber, Hagiuda is seen as more in touch with
Japanese people than his predecessor. “We will
consider what the most effective measures are
from the perspective of minimising the impact
on people’s lives and economic activities,” he
said.
With crude oil prices having hit seven-year
highs, Hagiuda did not go into detail, which has
led to some speculation as to what is being con-
sidered by the ruling Liberal Democratic Party.
At a press conference, the minister did go on
to say, however, that METI was “at the moment”
not looking to raise the current limit on subsidies
already in place or even considering freeing up a
‘trigger clause’ on gasoline.
Japan’s subsidy on gasoline was introduced Coming at a time much of the world is
earlier in the year but has already hit a ceiling of focused on the Ukraine-Russia border region
JPY50 ($0.4) per litre, with the government hes- and amid knock-on effects any conflict could
itant to raise this figure higher. have on oil prices, the talks mediated by the EU
The trigger clause in question was introduced “have reached an urgent point”, according to
in 2010, to help reduce gasoline and diesel taxes White House spokeswoman Jen Psaki.
Japan’s subsidy when prices move past JPY160 ($1.38) per Psaki went on to stress that if a deal were not
litre for three consecutive months However, in reached soon “Iran’s ongoing nuclear advances
on gasoline was the wake of the March 2011 Fukushima earth- will make it impossible for us to return to the
introduced earlier quake and tsunami in the north of Japan, it was Joint Comprehensive Plan of Action” (JCPOA).
frozen by METI as a means of raising funds for
Moves in the right direction would, however,
in the year but rebuilding. lead to increased Iranian crude volumes hitting
In addition to domestic efforts to alleviate gobal markets in a matter of weeks, helping to
has already hit a financial pain being caused by high crude prices, reduce the effects felt by the current supply
it is understood Japan continues to pressure oil squeeze.
ceiling. producers in the Middle East, particularly in And, according to Rane Risk Intelligence
the United Arab Emirates, and also in the US, analysts, “the US is accepting that it needs to go
to increase output to help keep prices under further this time to rebuild a sense of Iranian
control. trust and moreover to accept the political real-
Questions about Tokyo having approached ities that have come with [Iranian] President
Tehran to request Iran also increase output Raisi’s election”. New York-based political risk
were met with a curt “No” by Hagiuda, although agency Eurasia Group added that “Washing-
given Japanese moves in previous oil crises, such ton is willing to accept a deal with substantially
requests cannot be ruled out. weaker nuclear constraints on Iran compared
On the surface at least, Japan remains fully with the 2015 agreement, in terms of breakout
supportive of ongoing US sanctions on Iran, time, and to offer Iran sanctions relief or assur-
although investors in Tokyo and around the ances beyond the scope of JCPOA … Washing-
world are keeping an eye on the latest round of ton’s argument is essentially that some limits are
Washington-Tehran nuclear talks. better than none.”™

P10 www. NEWSBASE .com Week 07 18•February•2022