The escalating war in the Middle East has hit the pockets of Japanese citizens, with gasoline prices reaching a record 190.8 yen per liter. This massive increase, reported on March 16, highlights Japan’s precarious position as a resource-poor nation. The 29-yen weekly rise surpassed the previous record set in September 2023, signaling a new and more dangerous phase of energy volatility.
The price hike was triggered by the closure of the Strait of Hormuz, through which a vast majority of Japan’s oil passes. As the U.S. and Israel targeted Iranian infrastructure, WTI crude futures spiked to nearly $120. Wholesalers in Japan, facing these increased costs, were forced to raise their prices by 26 yen per liter, leading to the current retail record.
To mitigate the damage, the government will implement a subsidy of 30.2 yen per liter beginning Friday, March 19. Prime Minister Sanae Takaichi noted that without this intervention, prices could easily exceed 200 yen per liter. The subsidy aims to stabilize the average price around 170 yen, providing much-needed relief to the transportation and agricultural sectors.
However, the “lag effect” remains a concern for many households. It will take one to two weeks for the subsidized prices to reach the pump as retailers work through their current expensive inventories. This transition period means that while help is on the way, the burden of record-high fuel costs will remain heavy for at least the rest of the month.