The average retail price of regular gasoline in Japan rose for 10 weeks in a row to hit the highest level in seven years and three months, reflecting high crude oil prices, the industry ministry said Wednesday.
As of Monday, the price stood at ¥169.0 per liter, up ¥0.3 from a week earlier, the ministry said.
The average price for kerosene, chiefly used for heaters, also extended its uptrend to 10 weeks by rising ¥10 to ¥1,949 per 18 liters.
An official at the Oil Information Center, which conducts the price survey, said gasoline pump prices continued to go up despite cuts in wholesale prices last week because “service stations have yet to fully pass the past increases in purchase costs on to customers.”
But the retail price spike is expected to come to a halt next week following wholesale price cuts by around ¥0.5 this week, the official added.
With economic activities recovering from the slump caused by the coronavirus pandemic, demand for crude oil has been increasing globally.
The price of U.S. benchmark West Texas Intermediate crude oil has been staying at the highest levels in some seven years around $80 per barrel since mid-October.
Also pointing out that major oil-producing countries decided not to increase production on Thursday, Toshihiro Nagahama, chief economist at the Dai-ichi Life Research Institute, said if the WTI price remains in $80 terrain, “it will be as burdensome as a consumption tax hike by 1.7 percentage points” to households.
According to the ministry, the average pump price rose in 25 of the country’s 47 prefectures, including Tokyo, Osaka and Kyoto, and dropped in 13 prefectures such as Aichi. Nagano, Gifu and seven other prefectures saw the price stay flat.
Nagasaki and Kagoshima prefectures marked the highest price, at ¥176.4, followed by Nagano Prefecture, at ¥175.6. The average exceeded ¥170 in Tokyo and 12 other prefectures.
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