TOKYO, Reuters – Japan has begun to consider further measures in order to reduce the sharp increase in fuel prices, and the negative impact it will have on the lives of people, the minister for industry said Thursday. This is because oil prices remain high despite tight supplies.

Prices rose to new seven-year highs due to concerns about tight supply in the global market and disruptions caused by rising tensions in Eastern Europe. This has led fuel prices to rise in recent months.

Japan has been asking producers nations to boost their production. Last month, Japan started a temporary program to provide subsidies. The amount was raised twice and now stands at 50 yen ($0.4 per litre).

Koichi Hagiuda said that they would consider the best measures to minimize the economic impact of the crisis. However, he did not specify what those measures were.

He added that neither the ministry nor the trigger clause regarding gasoline tax were being considered by the minister for raising the threshold of subsidy.

2010. The trigger clause was designed to cut taxes on gasoline/diesel when gasoline prices stay above 160yen/litre for three consecutive months. It was then frozen to allow for earthquake rebuilding funds in the northeast.

Hagiuda stated that Japan will also continue asking oil-producing nations such as the United Arab Emirates, and the United States for more oil production to support stable oil prices.

He was asked by a reporter if Iran wanted to raise its output.

Investors around the world are watching closely to see what happens in U.S.-Iran nuke talks, which resumed last week. An agreement could allow the lifting of U.S. sanctions against Iran oil, and reduce global supply tightness. [O/R]

($1=115.5000 yen)