1 Month On, Iran Conflict Fuels Worries over Businesses, Households

Tokyo, March 28 (Jiji Press)–One month after the United States and Israel began attacking Iran, concerns are growing in Japan that soaring crude oil prices could lead to even higher food and other prices, putting additional strain on businesses and households. Iran’s de facto blockade of the Strait of Hormuz, a major oil chokepoint, has driven up crude oil prices, hitting businesses such as farms, “sento” public bathhouses, and public transportation operators. Dubbed the “blood of industry,” crude oil is essential to many industry sectors. It is refined into gasoline, kerosene, gas oil and fuel oil, which serve as power and heat sources, as well as naphtha, a raw material for plastic products. A senior member of a public bathhouses industry group in the western prefecture of Osaka voiced bewilderment over price hikes for fuel oil for boilers at such facilities. “The figures are shocking,” the official said. “I have never seen price increases like this.” Fuel oil prices in the first half of April are expected to be around 40 pct higher than in the second half of March. “Things are all right as long as (fuel oil is) available,” a sento operator in the city of Osaka said. “Once the supply is halted, we won’t be able to operate.” Higher oil prices have also delivered a blow to the dry cleaning industry, which uses fuel oil for boilers, as well as solvents, plastic hangers and packaging bags, all of which are made from oil. Concerned about securing raw materials for solvents, a chemical manufacturer official said, “It’s unclear whether we’ll be able to deliver (solvent products) in and after April.” The official added that prices of such products may rise by about 15 pct. Japan experienced a wave of price hikes for food and other products after Russia launched its military campaign against Ukraine in 2022. The ongoing situation involving Iran is delivering an additional blow. The supermarket and restaurant industries are worried about possible price increases and supply shortages of plastic containers for food packaging. Masahiro Ikeda, a greenhouse tomato farmer in the city of Yatsushiro in the southwestern prefecture of Kumamoto, said he is trying to get through the adversity by reducing his farm’s heater usage. Meanwhile, fertilizer prices are set to rise from 3,000 yen per bag to around 3,800 yen in April, reflecting increased transportation and other costs. “I may buy three months’ worth (of fertilizers) by the end of this month,” Ikeda said, adding that the current situation is “really tough.” In the transportation industry, some companies that used to be able to procure diesel fuel cheaply by buying in bulk are now struggling to secure enough fuel. These transporters can still make up for shortages by refueling at gas stations, but they find it difficult to pass on the additional procurement costs to their customers. There have also been many failed attempts to procure diesel fuel for public buses through bidding. A Kyoto city transportation bureau official said, “If we can’t secure (enough diesel fuel), it could seriously impact our citizens’ daily lives.” To curb rising oil prices, the government has introduced a subsidy program for petroleum products. It has also started releasing oil reserves to ease supply concerns. The International Energy Agency has called for energy-saving measures, such as telecommuting. However, an official of the Japanese industry ministry said, “We have stockpiled (oil) for times like this, so we are not considering (energy-saving measures) at this point.” END [Copyright The Jiji Press, Ltd.]