Japan's average retail price of regular gasoline hits an 11-month high, as experts attribute the hike to the Western sanctions on the Iranian oil sector.
The average retail price of regular gasoline in Japan has soared to an 11-month high of 152.60 yens per liter, with experts blaming the hike on the Western sanctions against Iran's oil sector.
The new price, which is 3.40 yens up from a week earlier, is the highest price since April 25, 2011, when gas prices spiked amid the conflict in Libya, a report released by Japan's Oil Information Center said on Wednesday.
The average retail price of premium, or high-octane, gasoline, in Japan has also risen 3.40 yens to 163.40 yens per liter.
According to the report, gasoline prices have been rising for four consecutive weeks before hitting the new level and are expected to continue rising, the Mainichi Daily News
Washington approved new sanctions on Iran's oil and financial sectors on the New Year’s Eve, aiming to penalize other countries for importing Iranian crude or doing business with its central bank. The European Union also imposed similar sanctions on January 23 to ban member states from importing Iran's oil and dealing with the Iranian central bank.
The unprecedented gas price hike in Japan, the Oil Information Center added, has clouded the outlook for domestic sales by Japanese carmakers as well as certain aspects of consumer spending.
An executive at a Japanese automaker also warned that higher prices "will make our overall sales situation severe."
“If the rising trend remains in place, it might crimp domestic demand in the second half of this year, when demand relating to the reconstruction from the Great East Japan Earthquake is expected to lose steam," Takahide Kiuchi, a chief economist at Nomura Securities Co., told the paper.
The US and EU say Iran’s nuclear energy program has a diversion toward military purposes, but Tehran refutes their claims, stating that as a committed member of International Atomic Energy Agency (IAEA) and a signatory to the nuclear Non-Proliferation Treaty (NPT), it is entitled to use nuclear energy for peaceful purposes.
The IAEA, in its frequent inspections, has never found any evidence of diversion in Iran's nuclear energy program toward military purposes.