Japan’s government and opposition parties have reached a historic agreement to abolish the long-standing 25.1-yen per liter gasoline surcharge by the end of December. The move comes as part of efforts to ease fuel costs for consumers and address inflationary pressure on households.
Introduced in 1974 as a “temporary measure” to fund road construction, the surcharge had been repeatedly extended for decades before becoming a permanent tax in 2010. Now, six major political parties — including the Liberal Democratic Party (LDP), Komeito, and the Constitutional Democratic Party of Japan — have agreed to phase it out.
To prevent sudden market disruptions, the government plans to gradually increase subsidies before removing the surcharge. The current 10-yen subsidy will rise to 15 yen on November 13, 20 yen on November 27, and 25.1 yen on December 11.
The abolition will result in an estimated 1 trillion yen in lost revenue from gasoline alone, with 1.5 trillion yen expected when diesel is included. Policymakers are now debating how to secure stable replacement funds.