The Japanese government will allocate approximately 810 billion yen (around $5.1 billion) from the budget reserve fund for the current fiscal year (ending March 31, 2026) to combat rising gasoline prices, the Kyodo news agency reports.

The funds will go toward replenishing the gasoline retail price subsidy fund. The decision is expected to be officially approved on March 24.

On March 16, the retail price of gasoline in Japan reached 190.8 yen per liter ($1.2 at the current exchange rate), hitting a record high since the current calculation methodology was introduced in 1990. The price increase is driven by a sharp rise in crude oil prices amid the escalating situation around Iran.

Meanwhile, government price containment measures took effect on March 19, aimed at keeping the retail price of gasoline at around 170 yen per liter. The subsidies apply to fuel shipments dispatched from that date onward and are expected to adjust retail gasoline prices within one to two weeks.

On March 16, Japan began releasing part of its national strategic oil reserves onto the market due to supply disruptions caused by US and Israeli strikes on Iran. In total, oil volumes covering the country's needs for 45 days will be put up for sale. This volume will be sold to wholesale companies at relatively low prices corresponding to levels before the US and Israeli strikes on Iran began. Japan's overall reserves cover the country's needs for approximately eight months.