Japan will raise its gasoline subsidy for oil distributors to the upper limit of 25 yen (21.1 cents) a litre for the week starting on March 17, the industry ministry said on Wednesday.
The government had raised the ceiling on the subsidy early this month to help blunt the blow of surging fuel prices exacerbated by the conflict in Ukraine.
The subsidy was set at 17.7 yen the previous week.
Japan implemented the temporary subsidy programme in late January given tight global supply, which caused oil prices to spike, but disruptions in Russian oil supplies have pushed prices up even further.
The government is tapping 350 billion yen ($3 billion) in emergency reserves for the fiscal year ending this month to fund the subsidies. It has not decided on plans beyond this fiscal year.
The government sets the subsidy amount every week if the retail gasoline price exceeds the threshold of 170 yen. Retail prices as of Monday reached 175.2 yen, rising for a 10th straight week, the ministry said.
($1 = 118.2600 yen)
(Reporting by Sakura Murakami; Editing by Chang-Ran Kim)