On October 18, the Oil Information Center reported that Japan's national average price for regular gasoline has surged to 190.8 yen per liter, marking an increase of 29 yen compared to the previous week. This spike to a record high has been attributed to escalating tensions in the Middle East, which have caused crude oil prices to soar. In response to this surge, the Japanese government plans to reinstate gasoline subsidies starting October 19, anticipating that the average price could drop back to around 170 yen over the following weeks.

The rise in gasoline prices follows the abolition of the old provisional gasoline tax rate of 25.1 yen at the end of last year, during which prices stabilized around 155 yen. However, geopolitical concerns, particularly relating to Iran, have led to a gradual increase in prices that accelerated dramatically this week. Previously, the highest recorded average price was 186.5 yen, noted in September 2023 and April 2025, indicating a concerning upward trend in fuel costs.

The driving factor behind the recent price increases has been the sharp rise in crude oil prices, with the benchmark U.S. WTI crude futures nearing a three-year high at around 119 dollars per barrel following attacks by the U.S. and Israel on Iran. Consequently, oil wholesalers raised their wholesale prices to gasoline stations by 26 yen per liter starting October 12. Without government subsidies, there were concerns about further price hikes in the coming weeks, highlighting how deeply international events impact domestic fuel costs and consumer behavior in Japan.