Rising Gasoline Prices in Japan Prompt Fears of Further Increases

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Rising Gasoline Prices in Japan Prompt Fears of Further Increases

In Tokyo’s Adachi Ward, the Nishi-Ayase SS gas station displayed a price board reflecting the increasing cost of gasoline on January 15, following a 5-yen rise from a month ago. The government's decision to further reduce subsidies has contributed to this price hike, with the average nationwide price for a liter of regular gasoline hitting 180.7 yen on January 14, prompting speculation of an additional increase from January 16 onwards. This impending rise in gasoline prices has caused a surge in customers at gas stations across the country, as individuals rush to fill their tanks before the anticipated hike.

The government's move to phase out subsidies, which were initially introduced as part of an initiative to combat rising fuel prices, has sparked concerns among consumers and industry players alike. A 29-year-old interior contractor in Tokyo voiced worries over the impact of the price hike on his work, stressing the essential role his car plays in his profession and mentioning the need to cut back on other expenses to accommodate the increase. Gas station managers also expressed fears of dwindling sales due to the higher prices, with reports of long lines of cars waiting at fuel stations like the one in Sapporo, where vehicles spilled out onto the road.

Despite public support for the subsidy program, criticism has emerged from experts like Takahide Kiuchi, an executive economist at Nomura Research Institute Ltd., who highlights the financial burden it places on the government and its negative implications for decarbonization efforts. While the government has taken some measures to address the subsidy reductions, such as reaching an agreement to reduce the gasoline tax by 25.1 yen per liter with opposition parties, concerns remain about the long-term sustainability of current policies and the need to explore alternative funding sources to navigate the changing landscape of fuel pricing in Japan.