The Japanese government on the 1st approved a cabinet decision to release ¥616 billion (approximately $3.9 billion) from FY2026 contingency reserves. Of that, ¥613.6 billion (approximately $3.8 billion) will fund fuel subsidies, including gasoline, helping maintain the nationwide average retail price of regular gasoline at around ¥170 (approximately $1.1) per liter. The allocation is intended to prevent the subsidy program from running out of money and does not change its framework or price benchmark. The program provides payments to oil wholesalers when crude prices rise, limiting increases in gasoline, kerosene, diesel and other fuel prices. Ministry of Economy, Trade and Industry data showed June subsidy spending of approximately ¥170 billion (approximately $1.1 billion), leaving about ¥210 billion (approximately $1.3 billion) by the end of July—80% of the initially secured ¥1.16 trillion (approximately $7.3 billion). The decision highlights the administration's preference for inflation relief but also raises fiscal-discipline concerns because contingency reserves can be used without prior parliamentary approval. The Sanae Takaichi administration has abolished spending request ceilings for ministries and agencies ahead of FY2027 budget preparation, establishing an investment framework for unlimited requests in areas deemed to support economic growth. Budget requests due by August 31 are expected to total approximately ¥143 trillion (approximately $895.1 billion), a record high for the fourth consecutive year. Higher interest payments on government bonds are also lifting requests. Further funding could be needed depending on crude oil prices, while prolonged subsidies could increase fiscal pressure.