Rising Crude Oil Prices Impact Daily Necessities; Costs for Fuel, Electricity, Household Goods All Linked to Petroleum

By Hiroyuki Kume / Yomiuri Shimbun Staff Writer

15:13 JST, March 10, 2026

Crude oil imported by Japan is refined into various fuels and raw materials at domestic refineries, meaning an increase in crude oil prices has the potential to affect a wide range of product prices.

According to the Petroleum Association of Japan, the uses of crude oil can be divided into three categories: heat sources like power generation and heating, accounting for 40%; power sources like automotive and aviation fuel, also at 40%; and raw materials for products like plastics and clothing, at 20%.

Increasing crude oil prices will directly impact the price of gasoline. According to estimates by Tsuyoshi Ueno, a senior economist at the NLI Research Institute, regular gasoline prices are expected to rise from their current level of just under ¥160 per liter. The potential increase is projected to offset the effect of last year’s abolition of the provisional tax rate surcharge of ¥25.1 per liter. If crude oil prices rise to $110 per barrel with no exchange rate fluctuations, prices are expected to climb to around ¥204 per liter.

High crude oil prices and supply concerns are increasing companies’ raw material procurement costs, potentially impacting everyday goods.

Mitsubishi Chemical Corp. announced Monday that it has begun reducing ethylene production at its Ibaraki Plant in Ibaraki Prefecture. Ethylene is a raw material for plastic products. This reduction is due to anticipated difficulties in procuring naphtha, a crude oil derivative that is a raw material for ethylene.

Takahisa Takahara, president of Unicharm Corp., a major household goods company that produces disposable diapers and non-woven masks, said at a press conference on Monday, “If this situation continues until summer, [production] costs will rise in the second half of the fiscal year.”

Electricity rates, in which crude oil prices are one factor, are also highly likely to rise. While crude oil accounts for less than 10% of Japan’s domestic power generation by fuel type, the cost of liquefied natural gas (LNG), which accounts for over 30%, is linked to crude oil prices.

Hisahide Okuda, president of major power generator JERA Co., told reporters in Tokyo on Monday, “If crude oil prices rise, it will be reflected in LNG prices, leading to higher electricity rates.”

According to estimates by Takahide Kiuchi of Nomura Research Institute, if crude oil prices rise by about 30%, electricity bills will increase by around 6%. This would mean an additional monthly burden of approximately ¥792 per household on average.