2023-08-26 09:02:07
(The photograph is an image)
As the price hikes of food and other items continue unabated, the national average retail price of regular gasoline hit a 15-year high, approaching the all-time high of ¥185.10. The government plans to extend the subsidies to curb the prices of gasoline and other products, which were scheduled to expire at the end of September, but crude oil prices remain high and there is no end in sight. Companies that use gasoline and kerosene are screaming. (Kotoshi Sunamoto, Tomoko Namiki)
◆ Profit decreased even though orders increased
“I never thought that the price of 200 yen per liter would be around the corner. It’s a very difficult situation.” Atsumu Minokuchi, who runs the transportation company Asty in Zama, Kanagawa Prefecture, has a grim expression on his face. This company delivers products to individual homes using about 40 light wagons, including those commissioned by her. Orders increased due to increased mail-order demand due to the corona crisis, but the unit price of delivery remained the same, so profits decreased by 5 to 6% compared to the time when the gasoline price was 120 yen per liter.
Furthermore, there are concerns about rising costs, such as the 2024 problem in logistics, where the minimum wage will be raised and regulations on overtime work for truck drivers will be tightened.
Since this summer, gasoline prices have soared due to production cuts in major oil-producing countries, the depreciation of the yen, and the reduction of subsidies. According to the Ministry of Economy, Trade and Industry on the 23rd, the national average retail price per liter of regular gasoline (as of the 21st) was 183.70 yen, marking the 14th consecutive week of price increases. According to the ministry, it would have been 195.70 yen without the subsidy.
Businesses using kerosene, which is subsidized in the same way as gasoline, are also severely affected. At Art Shokai, a cleaning business in Setagaya Ward, Tokyo, where kerosene is used for drying and ironing, the president Shigeru Motohashi (87) said, “The monthly kerosene bill was 70,000 to 80,000 yen. It’s swelled to 150,000 yen,” he said.
◆ Increased annual burden of 4,300 yen for households in the Tokyo wards
Soaring gasoline prices can also increase the burden on household budgets. The Dai-ichi Life Research Institute estimates that if gasoline costs 200 yen per liter and kerosene costs 140 yen per liter for a year, the annual household burden will increase by 16,000 yen. Even in the wards of Tokyo, where the use of private cars is low and the burden is the smallest, it is said that the cost will increase by 4,300 yen.
Initially, the government had planned to end the subsidies at the end of September, but has indicated that it will extend the subsidies, and plans to come up with measures by the end of the month. The ruling and opposition parties have called for the lifting of the freeze on the “trigger clause,” which reduces part of the gasoline tax if prices continue to rise, rather than temporary subsidies.
The government’s budget for subsidies to control fuel prices already exceeds 6 trillion yen. If it is extended, depending on the period and scale, it is expected that additional financial resources will be required, and there are concerns about how long the subsidy will continue and the difficulty of “exiting”. Koya Miyamae of SMBC Nikko Securities said that there are many issues to consider regarding subsidies, but he said, “Currently, the high oil price and the weak yen are overlapping.
gasoline subsidyIt started in January 2022 as a temporary countermeasure against high prices. A system in which the government provides subsidies to oil wholesalers and lowers wholesale prices to curb increases in retail prices at gas stations. In addition to gasoline, light oil, kerosene, and heavy oil are also covered. The subsidy rate has been gradually reduced since June this year.
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