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Transport minister Chikage Ogi balked Tuesday at a proposal by Prime Minister Junichiro Koizumi to spend part of 2.8 trillion yen in gasoline tax revenues on measures to safeguard the environment.

The money is traditionally used for public works road projects that keep construction companies busy.

“I question the appropriateness of having automobile users only pay a green tax,” the land, infrastructure and transport minister said.

On Friday, Koizumi ordered Ogi to use more of the roughly 6 trillion yen in annual petroleum and automobile-related tax revenues for policy measures other than road construction in fiscal 2003 and beyond.

Koizumi instructed the Council on Economic and Fiscal Policy the same day to set the amounts of petroleum and automobile-related taxes “by paying sufficient attention to the effects that certain taxes could have on improving the environment.”

Ogi said it would be inappropriate for automobile owners to shoulder the entire cost of safeguarding the environment, noting that motorists have been compelled to pay much higher taxes in comparison with those paid by other users of petroleum products, such as corporate users.

“The (per-liter) sum of gasoline tax paid as the revenue source for the specific purpose (of building highways) is 25 times that of another type of gasoline tax paid by corporate users of fuel oil from which various petroleum products are derived,” she said.

The government has, on an annual basis, set aside some 6 trillion yen in revenues from gasoline and diesel oil-related taxes and a range of taxes on automobile owners in order to build, improve or repair highways and roads.

Of this 6 trillion yen, gasoline tax accounts for some 2.8 trillion yen. Motorists now pay 48.6 yen in taxes per liter of gasoline — almost half the cost of the gasoline they buy.

Although previous tax rules mandated that car owners should pay just 24.3 yen per liter, the road construction emergency law temporarily altered these rules, doubling the tax until next March 31.

The Koizumi administration is contemplating a proposal to use the additional 24.3 yen portion of the gasoline levy to finance measures to safeguard the environment.

Critics of the proposal claim, however, that the entire 2.84 trillion yen should be used to build or repair highways and roads.

The tax revenue for road-building has been a major source of pork-barrel politics, and Koizumi’s plan to divert some of it to nonroad-related outlays faces strong opposition from members of his own Liberal Democratic Party.

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