When will gasoline subsidies resume? When will prices drop? An explanation of prices, mechanisms, funding sources, and the impact on daily life [Updated regularly]

Gasoline subsidies are back. But "peace of mind" and "preparedness" are two different things.

On March 19, 2026, gasoline subsidies were resumed. The official name is the "Emergency Mitigation Measures in Light of the Situation in Iran." On February 28, the U.S. and Israeli militaries launched large-scale attacks on Iran, and concerns over the blockade of the Strait of Hormuz pushed crude oil prices up sharply. As an emergency response, the government revived a variable system that fully subsidizes any amount exceeding 170 yen.

As of now (May 22), the national average is approximately 169 yen/L. The subsidy unit price is 42.6 yen/L, and approximately 1.08 trillion yen in funding has been secured. It is applied automatically just by refueling, with no application required, and it covers not only gasoline but also diesel, heavy oil, and kerosene.

However, this "peace of mind" has an expiration date.

According to estimates by the Nomura Research Institute, if gasoline prices remain at 200 yen, 230 to 250 billion yen in funding will be required per month. On May 23, senior Liberal Democratic Party officials made successive remarks suggesting a "review in consideration of the fiscal burden," and the end date is currently undecided. In a pessimistic scenario where the Strait of Hormuz is completely blocked and remains so for a long period, the Nomura Research Institute estimates that prices could reach 328 yen without subsidies.

Subsidies are merely a "buffer." They are nothing more than a temporary easing of the pain on household budgets using taxpayer money. The price-reduction effect of the provisional tax rate (25.1 yen/L), which was abolished at the end of 2025, has been almost completely wiped out by the current surge in crude oil prices. While it may feel cheap while subsidies are in place, the economic loss of crude oil costs flowing overseas cannot be covered by subsidies.

As a small business owner, what you should do now is not to be reassured by subsidies, but to start creating fuel cost plans based on different scenarios. If the calculation method for personal car commuting allowances is not clearly stated in your work regulations, now is the time to establish it. By thoroughly managing company vehicle mileage records and fuel costs, you can also prevent tax audit risks during periods of volatile price fluctuations.

"It's cheap now. But it will end."—Business owners who can operate under that premise will survive the next phase.
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