Crude Oil Spike Seen Impacting Households, Companies

Economy

Tokyo, Oct. 14 (Jiji Press)--The recent surge in crude oil prices is pushing up fuel costs, possibly dealing a blow to Japanese households and companies.

The average price of regular gasoline in Japan shot up to 162.1 yen per liter as of Monday, the highest in some seven years. If crude oil prices remain high, it may lead to a jump in prices of a broad range of products and services, such as electricity and plastic goods.

On top of the energy price surge, soaring prices of cooking oil and other items are also a major burden on households. "The risk of households' real purchasing power falling and consumption slumping consequently is on the rise," said Makoto Noji, chief currency and foreign bond strategist at SMBC Nikko Securities Inc.

Concerns about rising energy prices are also prevalent in the business world, with an official of a major parcel delivery firm complaining of ballooning fuel costs.

Many companies are trying to avoid raising the prices of their products and services by cutting costs in other aspects of their operations, but such efforts have their limits. With prices of fuel oil for vessels shooting up, an official of a major shipping firm voiced concerns about a negative impact on its earnings.

[Copyright The Jiji Press, Ltd.]

Jiji Press