Japan's cabinet approved 513.5 billion yen (around US$3.23 billion or S$4.12 billion) on May 26 to subsidize electricity and gas bills for households from July to September 2026 due to rising energy costs linked to the Middle East conflict [1]. Deputy Chief Cabinet Secretary Masanao Ozaki said, "We approved the spending of 513.5 billion yen (S$4.12 billion) at the Cabinet meeting today to support electricity and gas bills between July and September" [1].
Subsidies will amount to about 5,000 yen per household over three months from July through September 2026 [2, 3]. The subsidy per kWh is set at 3.5 yen in July and September, and 4.5 yen in August, higher than the levels provided in 2025 [2, 3]. Ozaki added, "Even as the situation in the Middle East remains uncertain, we will do our utmost to ensure there is no disruption to people's daily lives or economic activity" [1].
The subsidy funding will come from the 2026 fiscal year budget reserve funds, avoiding a major increase in government bond issuance due to offsetting fiscal factors [2, 3]. Alongside the electricity and gas bill relief, Japan plans a larger supplementary budget exceeding 3 trillion yen aimed at tackling energy and inflation concerns. About 2.5 trillion yen is allocated for energy and inflation countermeasures, 500 billion yen for general use, and approximately 100 billion yen to support LPG users [2, 3].
Prime Minister Sanae Takaichi announced the extra budget plan worth US$19 billion on May 25, one day before cabinet approval of the subsidy support [1]. Electricity and gas bills are not expected to rise significantly during May and June but will increase starting in July due to higher fuel import costs tied to the global situation [1].
