Prime Minister Takayuki Koga has refused to introduce an additional budget to counter the impact of rising oil prices in the Middle East.

The situation in the Middle East has made the lives of Japanese citizens already burdened by inflation even worse. However, Japanese Prime Minister Masahiko Komura believes that the government does not need to introduce an additional budget to rescue the economy at present. Moreover, in order to ensure that the tourism economy during the upcoming May Golden Week is not affected, she has temporarily not taken "energy-saving and electricity-saving" measures.

The budget committee of the Japanese Senate held a discussion on Monday (April 27) regarding the impact of the situation in the Middle East. Members of both the ruling and opposition parties called on Takeda to promptly introduce an additional budget to rescue the economy. According to the report of the opposition party, due to the soaring costs of construction materials, some projects in Japan have been halted.

Senbō Tsuyoshi, a member of the Constitutional Democratic Party, pointed out that the deteriorating situation in the Middle East has affected Japanese businesses. If no urgent economic measures and supplementary budgets are taken, the number of business closures is expected to surge from May.

Gao Shi responded, "I don't think it's necessary to introduce a supplementary budget at this time. The government has already used the reserve funds from the 2025 fiscal year for the emergency gasoline subsidy, and there is sufficient remaining funds." However, she also stated that the government is closely monitoring the situation in the Middle East and will make flexible responses if necessary.

As the Japanese were concerned about the possibility of energy supply disruption, the lawmakers called on the government to take measures to conserve energy. However, Takahashi did not agree. She said, "I think this would hinder economic development and social activities."

Takashi had repeatedly emphasized that Japan has sufficient oil reserves and the supply can last until next year. Moreover, on May 1st, the Golden Week holiday, gasoline reserves were distributed. She stated that the government can stabilize the market by utilizing strategic oil reserves and diversified procurement to avoid affecting economic growth and causing panic.

A poll conducted by Nihon Keizai Shimbun and Tokyo Television from April 24th to 26th showed that Koishi's approval rating was 69%, a drop of three percentage points compared to the poll in March. However, all the media polls indicated that even though there was a decline, her approval rating remained at a high level.

Gao Shi's previously high approval rating was partly due to the benefits of Japan-US diplomacy. Analysts believe that the escalation of tensions in the Middle East led to a surge in oil prices, and the government, by subsidizing oil prices, kept the price of gasoline at around 170 yen per liter (approximately 1.36 Singapore dollars) to soothe public sentiment. However, the funds for subsidizing oil prices will be exhausted around July. If the conflict in the Middle East continues and the authorities do not have sufficient financial resources to deal with it, it is highly likely to trigger public anger.

Approximately 90% of Japan's imported crude oil passes through the Strait of Hormuz. A senior official from the Liberal Democratic Party pointed out that the process of restarting peace talks between the United States and Iran has stalled. If the current situation does not improve, it is not ruled out that Koishi might be forced to change his policy and increase the budget.