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Prepare for petrol price perplexity

April 25, 2008

One thing that Japanese politicians are always hoping to avoid, but are always causing, is ‘confusion’. And with Golden Week and the end of April approaching, Japanese motorists are getting reading for some ‘major confusion’.

Except of course, there is no confusion in the literal sense. It’s an absolute certainty that petrol prices are going to go up. And by more than a little.

The government are working to reinstate the so-called temporary petrol tax that ‘ran out’ at the end of March, leading to a drop in pump prices of ¥20-25. If they succeed, it’s likely to be slapped back on at the beginning of May. The beginning of May also coincides with Golden Week, when Japan goes on holiday en masse, and traditionally gets shafted by a pre-Golden Week price hike at petrol stations anyway.

When the ¥25 tax was removed at the beginning of April, prices round here fell, at the very most, by ¥20, and consumers waited for 3-5 days to see the benefit, as retailers waited to ‘finish stocks of petrol bought at the higher, taxed price’. Even so, there were grumbles from petrol retailers about projected losses.

With the start of Golden Week, the Japanese consumer can expect to get a three-way shafting – the now traditional ¥4-5 Golden Week hike, the continuing rise of global crude prices, and the reinstatement of the tax.  And when the tax comes back, will it be (as cynics like me suspect) at a full ¥25 even at stations that only reduced prices by ¥20 or less? There’s potential for the added confusion of when retailers choose to readjust the tax/price – selling petrol that they bought at the lower price, will they maintain the lower price while they still have stock (just as they maintained the higher prices until they’d sold all their higher priced stock a month ago), or will that tax go back on the second it can?

Assorted media are mentioning prices of ¥160 or higher.  For comparison, my nearest petrol station is currently selling at ¥122, so we’re talking about a rise of over 30%.

Will all this be enough to enrage the traditionally docile Japanese consumer? The pre-Golden Week price hike is the most interesting part of the equation. Just as everyone prepares get in their cars and go off on holiday, the petrol prices are raised. Every year, like clockwork, the captive audience gets shafted. And does little more than quietly grumble, and acquiesce and pay up.  After all, what’s the alternative – vote for change, or something equally mad?

One Comment leave one →
  1. remora permalink
    April 25, 2008 4:03 pm

    as you might agree – sometimes I read articles in certain journals/papers.. which takes me time to digest..

    (Christopher a case in point)..

    *that was very long and detailed ..and very well written*

    (I will always try to read wot you write..)


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