The average retail gasoline price in Japan climbed to its highest level in seven years earlier this week, reflecting a recent global surge in crude oil prices, the Ministry of Economy, Trade and Industry said Wednesday.
The average price for regular gasoline stood at ¥162.10 ($1.4) per liter as of Monday, advancing ¥2.10 from Oct. 4 and hitting its highest level since October 2014, according to the ministry.
The rise is expected to deal a blow to household spending in Japan amid speculation that domestic travel will increase after the latest COVID-19 state of emergency through Sept. 30.
The upward trend in the average kerosene price, which stood at ¥1,814 per tank, or 18 liters, on Monday for the sixth straight weekly gain, may also hurt households going forward as heating demand increases during the winter months.
Crude oil prices have been advancing due to speculation that a reduction in COVID-19 cases across the globe and subsequent economic recovery will lead to an increase in demand. However, their climb can lead to a rise in raw material costs, squeezing corporate profits.
Gasoline prices are projected to continue rising through next week, according to the Oil Information Center, which expects crude oil prices to remain high and influence retail prices.
The surge in crude oil prices over the past few weeks has raised fears over increasing inflation and stirred uncertainty over the global economy.