Japan’s average gasoline price has reached a new high of 190.8 yen per liter, driven by the ongoing military crisis in the Middle East. This price, recorded on March 16, is the highest in the nation’s history and comes after a massive 29-yen jump in a single week. The spike is a stark reminder of how sensitive the Japanese economy is to global oil fluctuations.
The war between the U.S., Israel, and Iran caused WTI crude futures to briefly hit $119 per barrel, leading to a sudden and sharp increase in wholesale fuel costs. While crude prices have since settled between $80 and $100, the damage to retail prices was already done. Wholesalers increased their prices by 26 yen per liter, leading directly to the current record.
Starting March 19, the government will provide a 30.2-yen-per-liter subsidy to lower costs. The objective is to stabilize the retail price at around 170 yen and ensure it does not breach the 200-yen mark. However, motorists should be prepared for high prices for another 7 to 14 days while gas stations sell off their current inventory.
For much of the past year, gasoline had cost around 155 yen after the tax surcharge was ended. The sudden reversal of this trend has put the government on high alert. With no immediate end in sight for the Middle East conflict, the subsidy program will be a vital lifeline for Japanese households and businesses.