By Yoshifumi Takemoto
TOKYO (Reuters) -Japan's government is considering extending until year-end fuel subsidies to keep gasoline prices below 180 yen a litre, while working on a supplementary budget to finance broader measures, three people with direct knowledge of the matter said.
The sources, who declined to be identified because they were not authorised to speak to the media, said details of the proposal were being discussed by officials from the ruling Liberal Democratic Party (LDP) and its ally Komeito.
Asked about the extension, Toshimitsu Motegi, the secretary general of the LDP, said the party would draft measures on Wednesday aimed at curbing gasoline prices.
Other measures that would cover utility bills and wage hikes will be discussed in September, he added. He did not give any details about the measures.
Earlier, the sources had said the fuel subsidies would be funded by the supplementary budget.
Finance Minister Shunichi Suzuki declined to comment about the proposal.
"We must achieve the both aim of reviving the economy and restoring public finances," he told reporters.
Last week, Prime Minister Fumio Kishida instructed ruling party officials to consider steps to extend the fuel subsidies which were introduced in January 2022 to help ease cost of living pressures.
Gasoline prices have been rising steadily in Japan due to the weaker yen and higher global prices.
Extending the subsidies would make it difficult for the government to achieve Kishida's aim of bringing the primary budget balance, which excludes new bond sales and debt servicing costs, into the black by the fiscal year ending March 2026.
The government has said that it could achieve a primary budget surplus by the following fiscal year, with a deficit of 1.3 trillion yen left in the target year.