Japanese Drivers Swarm Gas Stations after Tax Removal

By Brendan Moore

04.01.2008

Japanese motorists are queuing up at gasoline stations across the country to take advantage of a temporary lapse in the national gasoline tax.

The special fuel tax of approximately $0.25 USD per liter expired at midnight, March 31, after a contentious debate and subsequent deadlock in parliament. Doing the currency and metric conversion for you, that is a reduction of around 95 cents per gallon. The tax funds road projects in Japan. The prime minister of Japan, Yasuo Fukuda, said eliminating the special surcharge would leave a $26 billion chasm in the federal budget.

Motorists are waiting in lines of 30 vehicles or more in order to fill up their tanks. There have been some reports of people sleeping in their cars overnight so that they guarantee themselves a place in the front of the queue at their local station. Many gasoline stations in Japan have seen their sales volumes of fuel jump to over 300%. Everyone in Japan is topping off their tank.

Sales volume is so high that the Japanese government had to issue a warning yesterday against stockpiling gasoline at home since it is believed that many motorists are buying all they can against their future fuel needs. Japan’s Fire and Disaster Management Agency issued a strong warning to consumers across the nation not to store gasoline at home because of the high risk of explosion.

A smaller tax on diesel fuel also expired at the same time, but diesel in Japan is used almost exclusively by heavy trucks and therefore has considerably less impact.

The glee that Japanese motorists are experiencing now may have a downside, though. The earliest the gasoline surcharge could be restored is April 29, which is a month away. After a month of much lower gasoline prices, consumers may rebel in unhappiness when the tax is reinstated. Japanese politicians have painted themselves into a bit of a corner.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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9 Comments

  1. 95 cents! Wish the government here would do that! That’s awsum!

  2. Those Japanese are going to be plenty pissed off in a month when the price goes back up. They need a tax cut champion like President Bush.

  3. I agree; let’s send Bush to Japan as soon as possible. VP Cheney, too.

  4. If the Japanese had been paying low prices for gasoline over the past decades, their cars would look like ours here in America – big and thirsty. The high taxes made their cars better and ultimately, much more competitive in the global market.

  5. The Japanese are not like Americans, they are fully aware that the tax will be coming back soon and they accept that. It’s just a blip that they’re taking advantage of now. Although I wouldn’t want to be living next to anyone storing a bunch of gasoline in their house/apartment.

  6. another vote for sending Bush and Cheney to Japan. Or anywhere else besides America.

  7. I guess this is what McCain wants to do here!

  8. All I can visualize is the crowd scenes from the Godzilla movies.

  9. This will be the same scene here in the U.S. if McCain and Hillary Clinton get their way about repealing the gas tax this summer. All it will do is stimulate more demand for gasoline and promote more driving, and then after it’s over, everyone has a hangover and feels bad about the raised price.

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