Crude oil prices soar for two consecutive weeks
On June 15, 2022, the Agency for Natural Resources and Energy announced a retail market survey of petroleum products, including gasoline.
Looking at the item of regular gasoline, the national average price per liter is “171.2 yen” as of June 13, which is 1.4 yen higher than 169.8 yen as of the 6th of last week.
Although it improved to 168.2 yen on May 30, crude oil prices have soared for the second straight week since last week. It is said that this background is largely influenced by the unlocking of lockdowns in Shanghai, China.
Expected to be 215 yen next week without subsidies
Currently, the “fuel oil price control system” is applied to petroleum products to control the rise in gasoline prices. This system has been applied since January 25, and although a subsidy of 38.8 yen per liter was provided, crude oil prices are likely to continue to rise.
The current selling price is the price after the subsidy is applied. According to the Ministry of Economy, Trade and Industry, the price of regular gasoline will be 210.6 yen if there is no subsidy, and it is expected to be 215.8 yen as of June 20th next week.
In response to this, the amount of subsidy will be increased to 41.4 yen from June 16th.
Explain here about the fuel oil price control system
Freezing of trigger clause still continues
When the national average price of regular gasoline exceeds 160 yen for 3 consecutive months, the “trigger” to reduce the special tax rate of 25.1 yen for the “volatile oil tax” and “local volatile oil tax” levied on gasoline. The “clause” is still frozen.
It was born by the tax reform in 2010, but it has already met the conditions, but it has not been activated in order to secure the financial resources for reconstruction from the Great East Japan Earthquake the following year.
In the first place, in addition to the consumption tax, multiple taxes such as “volatile oil tax”, “local volatile oil tax” and “petroleum coal tax” are levied on gasoline, and double taxation has been pointed out.
In fact, there is almost no price difference between regular gasoline and light oil overseas. Even in Japan, regular prices would have been the same as light oil if no taxes were levied. Even if it is not a trigger clause, there is an urgent need to resolve these issues.