Japan gasoline prices hit record high amid Iran war

Retail gasoline prices in Japan surged to a record 190.80 yen per liter ($1.41) on March 18, reflecting rising crude oil costs linked to the ongoing war in Iran, according to data from the Ministry of Economy, Trade and Industry (METI). The jump comes just a day before state subsidies designed to ease fuel costs are set to resume.

The March 18 average price marked a 29.0 yen ($0.21) increase from March 9, matching the largest single-week gain since comparable data became available in 1990 and representing the fifth consecutive weekly rise. It surpassed the previous peak of 186.50 yen ($1.38) recorded in April 2025, when a weak yen pushed up import costs for crude oil, Caliber.Az reports via Japanese media. 

The surge follows US-Israeli strikes on Iran that began on February 28, followed by Iranian retaliation against Gulf countries, heightening global concerns over energy supplies in resource-poor Japan.

The increase coincides with the government’s plan to reintroduce subsidies aimed at keeping gasoline prices around 170 yen ($1.26) per liter. Prime Minister Sanae Takaichi announced last week that government funds would be used to prevent prices from surpassing 200 yen ($1.48).

The ministry confirmed that “subsidies of 30.20 yen per liter ($0.22) will be provided to petroleum suppliers for the week from March 19,” adding that the measure is expected to take about a week to be reflected in retail prices.

"We will make sure that the price will gradually decline to 170 yen," ($1.26) a ministry official said.

This marks the return of subsidies less than three months after their previous termination on Dec. 31, 2025—the same time Japan abolished its provisional gasoline tax of 25.10 yen ($0.19) per liter, which had been in place for over 50 years to alleviate household financial burdens. The removal of the provisional tax briefly pushed prices down to 154.70 yen ($1.15) in mid-January, contributing to a slowdown in nationwide inflation to 2.0 percent, the lowest in two years.

Japan’s gasoline subsidy program was first launched in January 2022 to curb rising fuel costs driven by higher crude oil prices amid Russia’s war on Ukraine and a weak yen. Over roughly four years, the government has allocated more than 8 trillion yen ($59 billion) in budgets for this program, which also caps diesel and kerosene prices.

As of March 19, gasoline prices had risen across all 47 prefectures. Diesel climbed 28.60 yen ($0.21) from a week earlier to 178.40 yen ($1.32) per liter, while kerosene prices increased 507 yen ($3.76) to 2,774 yen ($20.55) per 18 liters, the standard home storage tank size.

By Sabina Mammadli