Though the rise to 2,000 yen ($21.50) may not dent auto fuel demand, already on the wane due to more use of fuel-efficient cars, it reflects the dilemma Japan faces in balancing pressures to cut one of the world's costliest highway tolls with the commitment to reduce car traffic.
Premier Yukio Hatoyama has asserted his aim to pursue free highways, in line with the Democratic Party's campaign pledge, but analysts warned it could upset the nation's target to cut carbon dioxide emissions by a quarter by 2020 from 1990 levels.
A study by the Institute of Energy Economics, Japan (IEEJ), showed free highways would raise annual gasoline demand in the world's third-biggest oil consumer by 7.2 percent, or 4.1 million kilolitres (71,000 barrels daily).
It would also emit 9.6 million tons of CO2 to the air, nearly 1 percent of the nation's total.
"Under the 25 percent cut road map, the Environment Ministry aims to reduce auto passenger traffic by 10 percent," said Shigeru Suehiro, senior economist at IEEJ.
"If (the highway) does become free, lots of people will switch to cars from railroads. From the point of view of the environment and funding issues, it may be appropriate to gradually raise tolls with careful consideration of the economic recovery."
Tetsuo Yai, science and engineering professor at Tokyo Institute of Technology, said the hike would "more or less" be useful in curbing highway usage, but the reduction of CO2 emissions could be limited if ordinary roads become congested.
"The bottom line is that consistent policies that look ahead beyond 2020 would be necessary," said Yai, who served in the government CO2 advisory task force.
Highway Toll Cap
Japan implemented a highway toll discount system in March 2009, capping the rate at 1,000 yen irrespective of the mileage for passenger cars and is only valid during weekends, in a move ostensibly to stoke the flagging economy.
With the catch-phrase "1,000-yen highway" and coupled with relatively low retail gasoline prices last year, many drivers hit the roads. The IEEJ study showed gasoline demand rose 1.3 percent from the period the system was introduced till November.
But it was not enough to lift overall gasoline demand, which likely fell 0.4 percent in the year ended March for a fifth-straight year of decline, a Reuters projection showed. Without the cap system, Japanese drivers would have to pay about six times the U.S. average and double that of France, although most highways in the United States are free.
However, with the higher toll from June, the cap system will be in force seven days a week, the first time the national highway network would have toll curbs throughout the week.
This may spur long-distance driving even on weekdays and improve gasoline consumption, which would run counter to Japan's environmental obligations and may force the government to raise the caps further, analysts said.
Another factor supporting auto fuel consumption is that 18 percent of the highway network in rural areas would become free from June.
Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting, said the ruling Democratic Party may in future back away from advocating free highways to streamline its policies around the steep CO2 reduction targets.
"It may be difficult (for the government) to change the goal of free highways, but if highways became free in future, the curbs on the use of gasoline, like the environment tax, will surely be put in place for balance," he said.
The new system in theory would also boost toll revenues by more than 100 billion yen a year, possibly another reason to encourage the government to continue to raise the cap.
It aimed to shift 1.1 trillion yen of the tax money originally reserved for making the current deep highway discounts possible t
