TOKYO (Reuters) - Japan's government on Tuesday has approved an increase in household electricity rates of made by seven major utilities after delays in examining their requests as the government sought to address record high inflation.
The hikes, ranging from 14% to 42% to reflect higher fuel costs, will add pressures on the world's third-biggest economy.
Japan's core consumer inflation likely re-accelerated in April, a Reuters poll of 19 economists showed, as a flurry of retail price hikes offset the effect of the government's energy subsidies.
Against the backdrop of soaring fuel prices last year following Russia's invasion of Ukraine, seven utilities, including Tokyo Electric Power (TEPCO), have requested the hikes in electricity rates from April and June to offset high input costs.
But the government has taken several months to examine their requests to ease the high inflation burden on consumers.
On Tuesday, a group of ministers met to discuss price issues and approved the increases, which take effect on June 1 at the earliest, and which will be reflected in the July bill.
The utilities initially applied for a price increase of 28-48%, but the industry ministry ordered a recalculation of costs based on the latest fuel prices and demanded a reduction in fixed costs to curb the rate of increase to 14-42%.
"We have conducted extremely rigorous assessments," Yasutoshi Nishimura, the industry minister, told a news conference.
Hokkaido Electric Power's increase is 21%, Tohoku Electric Power's is 24%, the increase is 14% from TEPCO, 42% is Hokuriku Electric Power, 29% by Chugoku Electric Power, 25% by Shikoku Electric Power, and 38% by Okinawa Electric Power, according to the ministry.
Delaying the hikes and reducing the rates are expected to squeeze the loss-making sector between high global fuel prices and Tokyo's green goals.