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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (4133)	5/12/2006 9:52:31 PM
From: Wharf Rat	Respond to of 24235

Consumers feeling high cost of crude oil Takayuki Nishizawa Yomiuri Shimbun Staff Writer Consumers have begun to feel the effects of rising crude oil prices, with the price of regular gasoline hitting its highest level in 15 years and the transportation industry raising prices. The nation's average price for regular gasoline reached 134.9 yen per liter on May 1 for the first time since the Gulf War. Although some have expressed hopes of crude oil import prices falling due to the strengthening yen, most in the oil industry predict the price of petroleum products will remain high for a longer period of time than during the Gulf War. The prediction has driven industries consuming gasoline and light and heavy oil to raise prices. The national average price of regular gasoline rose by 11.1 yen per liter in the past year. To save money, some customers buy gasoline 10 liters at a time or choose not to have their vehicles washed at gas stations. The rise in the price of crude oil also has led to higher jet fuel costs for the airline industry. In March, Japan Airlines and All Nippon Airways applied for a special fuel surcharge for international flight rates. Currently the companies charge an additional 2,700 yen for a Narita-Beijing flight, but the newest surcharge would add 400 yen to the surcharge for tickets issued from June 1. One out of four truck companies has included the rise in diesel costs in its fees, despite having been pressured by clients to lower rates. According to a survey by the Japan Trucking Association in February and March, more companies raised their rates in April. It also said some companies have become reluctant to accept long-distance contracts due to low profitability. Material manufacturers face a similar trend. Due to a price surge in materials, such as resin and fuel, Toto Ltd. will raise the price of sanitary ware by an average of 6 percent and tiles by an average of 4 percent from July 1. Faced with the high price of heavy diesel oil (class A), which is used to run boats, the National Federation of Fisheries Cooperative Association urges fishermen to save fuel by pointing out that fuel use by a small fishing boat can be cut by 9 percent by reducing speed by one knot. "Some fishermen, mostly those for seasonal skipjack, refrain from going out on the water because it's not profitable," the association said. Amid soaring crude oil prices, accidents at domestic oil refineries have added to the cause of the high price of petroleum products, said Toshinori Ito, a senior analyst at UBS Investment Bank. Ito predicts regular gasoline prices to rise further by 1 yen to 2 yen per liter. "The industry is under pressure to directly pass the rise in crude oil price on to gasoline prices. Therefore, I don't think the price of regular gasoline would reach 140 yen level per liter. Rather the impact of the rising price of industrial-use fuel, such as heavy oil A, is spreading," Ito said. Some major appliance makers have suspended sales of kerosene heaters. "If the price of crude oil remains high for a long period of time, people will depend more on other fuel," Ito said. === 'More serious than Gulf War' The price of regular gasoline reached the current level in February 1991, at the peak of Gulf War. The gasoline price at the time surged by 17 yen per liter in two months from Aug. 27, 1990, when the Oil Information Center began taking weekly data. It surged to the peak at 142 yen per liter on Oct. 22. After eight weeks at the peak price, it gradually fell to the 135 yen per liter mark on Feb. 12, 1991, and to less than 130 yen in July of the same year. For the first time in about eight years, international airfare and airfreight charges for flights departing from Japan were raised by 5 percent in December 1990. Detergent makers began to shift their resources into producing and marketing detergents made mainly from agricultural products, such as palm oil. The latest rise in gasoline price has remained at 4.6 yen per liter for two months in the period up to May 1. However, the rise in oil prices has continued since the spring of 2004. In the past two years, it rose by 29 yen per liter, which, some suggest, is more serious than during the Gulf War. Meanwhile, the yen surged to 111 yen against the dollar, about 20 yen higher than the 130 yen-level during the Gulf War. "If the yen remains strong against the dollar, the impact of high crude oil prices on the Japanese economy will be limited," an analyst said. (May. 11, 2006) yomiuri.co.jp