As most local governments drafted their budgets for fiscal 2008 on the basis of the high gas taxes, the revenue shortfall may also adversely extend its impact to other public services as well as road construction projects.

Yoshinobu Nisaka, governor of Wakayama Prefecture, suggested that the government would have to cut budgeted funds for welfare, education and other fields to secure the budget for road-related works.

The ruling-opposition dispute also clouds the future that local governments have designed.

"Because it is hard to read in which direction the central government will head, regional governments are also unable to predict their future course," said Hideo Higashikokubaru, governor of Miyazaki Prefecture, adding that confusion in people's daily lives will also arise.

The ruling coalition, however, hopes to revive the higher tax rates in late April through a lower house vote. Under Article 59 of the Constitution, the gas tax bill, which was submitted to the upper house on February 29, can be sent back to the lower house if the upper house does not hold a vote on it within 60 days. The bill will become law once the lower house votes by a two-thirds majority for it.

If the revenue-related bills win the Diet's endorsement late April, the revenue shortfall will be limited to one month at somewhere between 100 billion and 200 billion yen. And gas prices will probably fall in April and then return to the current level about one month later.

(Xinhua News Agency March 31, 2008)