Thursday, May 01, 2008

Gas prices expected to top 160 yen

After the ruling coalition has its way in the Diet, the average retail price of regular gasoline is expected to top 160 yen per liter by the end of May, industry officials said.

That price would exceed the level on March 31, when the "temporary" surcharge expired.

The ruling coalition is expected to reinstate the surcharge on Thursday, a day after it plans to railroad a bill in a second vote in the Lower House to revive the higher tax rate.

In addition, petroleum companies, citing rising crude oil prices, will raise wholesale prices by 3.7 to 7 yen per liter in May.

Industry officials said the nationwide average retail price will rise to about 160 yen toward the end of May, up from 130.6 yen on April 21.

On March 31, the price was 152.9 yen. On that day, the surcharge of 25.1 yen per liter expired after a bill to extend the measure was blocked by the opposition-controlled Upper House.

The price in May would also exceed 155.5 yen set in December, the highest level since the Oil Information Center started a weekly price survey in 1990.

However, the gasoline price is not expected to rise to about 160 yen immediately.

The gasoline tax is levied when the fuel is shipped from refineries of petroleum companies.

Many gas stations are expected to pass on only the rise in wholesale prices to consumers until they run out of inventories from April shipments, which are free from the surcharge.

Still, some retailers may raise prices soon, particularly those eager to recoup losses suffered when they lowered retail prices amid price competition after the surcharge expired.

Nagoya-based Usami Kohyu Corp., which runs about 420 gas stations nationwide, said it will raise gasoline prices by about 30 yen per liter on Thursday.

Observers said rival gas stations may follow suit, pushing up retail price levels.

Nippon Oil Corp., the nation's top oil refiner and distributor, said Monday it will raise wholesale prices of oil products in May by 3.7 yen per liter from the previous month.

Showa Shell Sekiyu KK and Idemitsu Kosan Co. announced plans to raise their wholesale prices by 5.2 yen and 7 yen, respectively. Japan Energy Corp. is also planning an increase by several yen.

Petroleum companies, expecting many consumers to fill up their tanks before the surcharge is revived, have increased supplies to gas stations to meet the demand.(IHT/Asahi: April 30,2008)

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