Rising Gasoline Prices in Japan Reach ¥185 Per Liter Amid Subsidy Reductions

According to the industry ministry of Japan, the average price of regular gasoline has risen above ¥185 per liter for the first time in 17 months. This increase, now at ¥185.10 after a jump of ¥4.40 from the prior week, is largely attributed to the government's decision to reduce subsidies for oil wholesalers. The last time gasoline prices exceeded ¥185 was on September 4, 2023, when they reached a record high of ¥186.50.

Gasoline prices have been observed to increase in all 47 prefectures, with six areas reporting prices exceeding ¥190 per liter. Kochi Prefecture recorded the highest average price at ¥193.60, followed closely by Nagano Prefecture at ¥193.50, while Iwate Prefecture reported the lowest price at ¥177.80. The government's subsidy cuts, which commenced in December, have significantly impacted these price changes.

Previously, the government subsidized 60% of the price difference when the gasoline price surpassed a base price of ¥168 and remained under ¥185. However, this subsidy was subsequently reduced to 30%. Beginning Thursday, the government ceased to provide subsidies for prices up to ¥185 but continues to support prices that exceed this threshold.

Following the initial subsidy cuts, gasoline prices across the nation increased from approximately ¥175 to around ¥180. The ministry anticipated further price hikes, although the Oil Information Center of the Institute of Energy Economics predicts that prices will stabilize around the ¥185 mark.