Takaichi Faces Quandary Between Energy Conservation, ‘Strong Economy’ as Impact of Middle East Tensions Are Felt

By Kentaro Kuroki / Yomiuri Shimbun Staff Writer

6:00 JST, April 8, 2026

The government and ruling parties are increasingly leaning toward measures to curb energy consumption, such as asking the public to reduce gasoline usage, amid the impact of the ongoing tensions in the Middle East.

Prime Minister Sanae Takaichi, whose top priority is the economy, is aiming to maintain normal economic activity through the release of state oil reserves and procurement of oil from alternative sources. However, if the situation is prolonged, the supply and demand balance could become tight. The situation that Takaichi is required to navigate is therefore challenging.

Gasoline subsidies questioned

“The current energy situation will inevitably be prolonged. I would like the government to respond with a sense of urgency,” said Masashi Adachi, a member of the ruling Liberal Democratic Party in the House of Councillors, at the upper house Budget Committee on Monday. He called for decisive actions such as energy conservation and demand suppression.

In response, Takaichi left open the possibility of taking such measures saying, “We will respond flexibly.” She also stressed that there was no major disruption in Japan at the moment, saying that domestic petroleum supplies were being secured through the release of state oil reserves and procurement from alternative sources.

Regarding the government’s gasoline subsidies, Takaichi posted on X on March 18, that the subsidies would keep the average price of regular gasoline at around ¥170 per liter and called for people to refuel their cars at their usual pace.

Some LDP members are questioning the government’s gasoline subsidies. At a meeting of LDP lawmakers on the situation in Iran held on March 24, some expressed dissatisfaction, with one saying, “It is the worst possible policy to reduce prices to boost demand when there are supply concerns.”

Former Foreign Minister Taro Kono, in a YouTube video uploaded on March 25, said, “The government needs to stop the gasoline subsidies and start telling people that it is time to start saving energy.”

Avoiding panic

The prime minister’s wariness on asking the public to reduce energy consumption appears to be due to her desire to avoid the negative impact it would have on consumer spending and corporate activities, which would pose a challenge to the realization of a “strong economy” outlined in her policy speech.

“If the government messes around, it could lead to chaos similar to that of the oil crisis in the 1970s,” said a senior government official, pointing out the need to prevent panic buying and other similar behavior. Nonetheless, concerns about supply shortages in industries such as health care and transportation have already begun to spread, and Takaichi’s statements are shifting to reflect a long-term perspective.

The prime minister posted on X on March 30, “Supplies will not be disrupted immediately,” while also stressing that under no circumstances should the supply of medical goods be disrupted. In addition, she also announced that she had appointed Economy, Trade and Industry Minister Ryosei Akazawa as the minister in charge of securing essential goods.

“We would like to consider all options, including measures on the demand side,” Akazawa said at a press conference the following day. A source close to Takaichi said: “The prime minister is now considering the specifics of an appeal to the public on reducing energy consumption. However, she is carefully assessing the content and timing of her messages to avoid causing unnecessary confusion.”