Japan set to raise gas tax, motorists queue

Tue Apr 29, 2008 11:47pm EDT
 
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By Isabel Reynolds

TOKYO, April 30 (Reuters) - Japan's ruling coalition is set to ram a bill through parliament on Wednesday restoring a tax of 25.1 yen (24.1 U.S. cents) a litre on gasoline in the midst of a string of national holidays, despite opposition by many motorists.

The move will likely further damage public support for Prime Minister Yasuo Fukuda, which opinion polls have shown already sagging below 30 percent, as voters fret about rising food and fuel prices.

"I know restoring the tax in Golden Week will not be popular, but I believe the people are sensible enough to understand," top government spokesman Nobutaka Machimura told reporters, referring to government warnings that the tax revenue was needed for its hard-pressed budget.

Long lines of cars formed at petrol stations across the country ahead of the expected move as drivers took advantage of the lower prices in the midst of Golden Week -- a string of three national holidays spread over a week that is a popular time for travel.

Tempers frayed at one petrol station near Osaka, where a man was arrested for threatening another driver after jumping a fuel queue on Tuesday, the Mainichi Shimbun reported.

Aggravating the issue, record global oil prices mean the price of petrol will likely jump by 30 yen after the tax is restored on Thursday, Japanese media reported.

"I only drive on the weekend, but I went and filled up quickly," said Kazuhiko Uchida, 41, who works in manufacturing.

"I think I will stop using my car when it's not really necessary," he added.

The petrol price fell when a three-decade old "temporary" tax lapsed at the end of March because of a stalemate in parliament.

Opposition parties, led by the main opposition Democratic Party, stalled the renewal of the tax by blocking it in parliament's upper house, which they control.

The government can override that vote in parliament's lower house after 60 days, which has now passed.

The opposition, which is pushing for an early election, says a tax earmarked for road building is wasteful.

"Seventy percent of the people say the temporary tax should be abolished... the most important thing is to maintain our opposition to this tax," Democratic Party executive Kenji Yamaoka told a meeting of party lawmakers on Wednesday.

The tax row, along with unpopular revisions to medical insurance for the elderly and a long-running scandal over pensions, helped the opposition win a by-election in southwestern Japan on Sunday, underlining the pressure on Fukuda.

He has been reported as saying he wants to avoid a general election until after Japan hosts the G8 summit of industrialised nations in July.  Continued...

 

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