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ECONOMY > Energy

Higher crude oil prices could affect Japanese households

  • September 17, 2019
  • , Jiji Press , 10:43 p.m.
  • English Press

Tokyo, Sept. 17 (Jiji Press)–Attention is being paid to the course of crude oil prices following a surge stemming from Saturday’s attacks on oil facilities in Saudi Arabia, with higher prices, if prolonged, likely to affect firms and households in Japan.

“Developments similar to those during the oil crises in the 1970s will not happen,” Kengo Sakurada, head of the Japan Association of Corporate Executives, or Keizai Doyukai, said in a regular news conference Tuesday, noting that the United States is becoming a net exporter of crude oil and that Japan has a certain amount of oil reserves.

Sakurada pointed out, however, that his prediction will prove wrong if higher crude oil prices continue for one year or longer or if an armed clash occurs.

Japanese oil wholesalers have been procuring crude oil increasingly from Saudi Arabia amid intensifying tensions over Iran. Crude oil prices “will not fall back to the levels before the attacks unless the safety of Saudi Arabia’s air defense is secured,” an industry official said.

A surge in crude oil prices may be passed on to electricity bills as early as December. The average retail price of regular gasoline, which has been on a declining trend and stood at 143 yen per liter as of Sept. 9, “may turn up and top 150 yen,” one industry source said.

Demand for overseas trips may drop if the rising crude oil prices lead to a hike in fuel surcharges for international flights.

“From a long-term viewpoint, the crude price surge may dampen the economy and consumption, and affect logistics costs,” an official of major Japanese brewer Asahi Group Holdings Ltd. <2502> said.

An official of an operator of a “super sento” public bath facility said, “We’re keeping close tabs on future developments while we see no need to raise admission fees at the moment.”

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