Oct. 4 (Bloomberg) -- Part of the gains in oil prices may need to be passed to Japan's consumers because companies can't keep absorbing rising costs, said Hiroyuki Hosoda, the chief government spokesman.

``That's an issue companies are discussing about, as oil price are soaring and businesses are under pressure to pass on rising costs'' to consumers, Hosoda told a daily briefing today.

Some cabinet ministers today held a meeting to discuss gains in prices and measures to support industries hurt by costlier oil, such as transportation and fishing industries. The ministers agreed that the government should support companies' efforts to save energy consumption and reduce dependence on oil, Hosoda said.

The cost of crude oil in Dubai, a benchmark for Japan's refiners, has surged 73 percent this year.

The government should also consider steps to shore up small businesses hit by high oil costs and boost efforts to secure stable oil supplies in Japan, the ministers said, according to Hosoda.

Confidence among Japan's largest manufacturers increased less than estimated in September, the Bank of Japan's quarterly Tankan survey showed yesterday, suggesting that higher fuel costs are hurting sentiment.

The quarterly index of confidence rose to 19 points in September from 18 points in June. The median forecast of 36 economists was for a reading of 21. A positive number means optimists outnumber pessimists.

To contact the reporter on this story: Mayumi Otsuma in Tokyo at motsuma@bloomberg.net

Last Updated: October 3, 2005 22:15 EDT