The uncertain situation in Iran and the resulting sharp rise in crude oil prices are causing great anxiety for route buses across Japan that run on diesel fuel.
■Price reductions due to “fuel subsidies”… On the 19th, gas stations in Hiroshima Prefecture made significant price changes.
In Hokkaido as well… Reporter Mayumi Ohara: “The price of regular gasoline has changed. It is displayed as 169 yen.” The government has begun providing subsidies of 30.2 yen to oil wholesalers. However, since this will only apply to stocks purchased on the 19th, this price reduction is due to the efforts of each gas station. This “fuel subsidy” covers four types of oil, including gasoline, and diesel fuel used in buses and other vehicles.
Finance Minister Satsuki Katayama: “The Ministry of Finance is absolutely committed to securing the necessary funds. We ask for your cooperation.”
■Anxiety of route bus companies On the 19th, the “LDP Bus Parliamentary League General Meeting” was held at the LDP headquarters. The chairman of the Japan Bus Association, which has over 2,000 member companies, also attended and appealed for help regarding the widespread “fuel supply concerns” on the ground.
Ichiro Shimizu, Chairman of the Japan Bus Association: “There’s the issue of wholesalers withholding fuel. Buses use a lot of diesel fuel. They can’t run without it, so please do something about it.” Chairman Shimizu also serves as the president of the Iyo Railway Group in Matsuyama City, Ehime Prefecture.
Ichiro Shimizu, Chairman of the Japan Bus Association and President of Iyo Railway Bus: “The oil problem is a major issue nationwide, but it would be especially terrible if public transportation buses were to stop.” The Iyo Railway buses, characterized by their distinctive orange color, are an important mode of transportation for the city’s residents.
Man: “They are indispensable.” (Q. How indispensable?) “I can’t live without them.” “It’s because it’s the countryside, after all. Parking is expensive, so the bus is very convenient. I use it as my daily mode of transportation.” There are 200 buses operating in the city, but how are they refueled…?
Announcer Toshimura Musashi: “The route bus that has returned to the depot is now being refueled with diesel at a gas station located on the company’s premises. This bus company says it uses up to 300,000 liters of diesel per month at its busiest.” ‘In-tank’ is a system where a dedicated fuel tank is installed on the premises of the business. Because they buy a large quantity at once from the fuel supplier, they have the advantage of being able to obtain it at a lower price. Even with subsidies, the unprecedented price increases are putting pressure on their operations.
Tomoyuki Nakagawa, Director of Iyo Railway Bus: “Based on the amount we have been notified of recently, we estimate that expenses will increase by tens of millions to hundreds of millions of yen. We hope that we can move in a direction where supply and prices can be stabilized as soon as possible.”
■ Public buses face a series of “unsuccessful bids” Some areas where public buses are operated by the government are struggling to procure fuel. Kyoto City Bus operates 810 buses mainly within the city, but according to the Kyoto City Transportation Bureau, three companies, including petroleum wholesalers, came to bid, but two companies withdrew their bids. The remaining company also exceeded the city’s planned price, so the bidding ended unsuccessfully.
■Struggles with the prolonged situation: “Passing on the price…” The Tokyo Metropolitan Bureau of Transportation also held a bidding process this week, but that also ended unsuccessfully. The president of a bus company in Tokyo said that even at meetings held between the city and the operators, the topic of discussion was “the future of fuel prices.” That’s right.
Hiroaki Yamamoto, president of the bus company “Ginga Tetsudo”: “(With the city) fuel prices are rising, which is tough. We’re also short on manpower, which is tough. We were hoping to turn things in a positive direction with the abolition of the provisional tax rate from April, but now it’s all just wishful thinking.” Because they use regular gas stations instead of dedicated tanks, they are also susceptible to price fluctuations. In addition, drivers have expressed concerns like this… Driver: “As summer approaches and it gets hotter, we’ll be using the air conditioner. That will change the fuel efficiency.” Route buses are not originally intended to make a profit, but they use more than 6,000 liters of fuel per month, which amounts to about 1.2 million yen.
Hiroaki Yamamoto, president of the bus company “Galaxy Railway,” said, “With tour buses, bus companies can freely set prices so as not to incur losses. This is not the case with route buses. It is a unique industry where we cannot pass on the increased cost of goods to customers.”
■1L = 190 yen, a “record high” According to the Agency for Natural Resources and Energy, the retail price of regular gasoline nationwide is 190.8 yen per liter (as of the 16th). This is a significant increase from the previous week, setting a new “record high.” This marks the fifth consecutive week of increases. In response to this situation, the government’s gasoline subsidy was resumed on the 19th. The government will provide a subsidy of 30.2 yen per liter to oil wholesalers in order to keep retail prices at around 170 yen. (19th-25th) These oil wholesalers will then deliver the gasoline to gas stations at a wholesale price with the subsidy amount deducted. The gasoline will then be sold to consumers at the reduced retail price. Some stores have already lowered their prices, but generally, it will take about one to two weeks for the retail price to drop to around 170 yen.
■Fear of a shortage of funds? Finance Minister Katayama has stated that if gasoline prices remain at their current level, “it will cost about 300 billion yen per month to keep them at around 170 yen.” The government plans to use a 280 billion yen fund for mitigating drastic changes as the source of funds, which is expected to cover the costs for about a month.
What will happen if this fund is used up? Finance Minister Katayama has mentioned the possibility of using the reserve fund. The reserve fund is money set aside to prepare for unforeseen circumstances such as disaster response, and is expected to reach 1 trillion yen next fiscal year. However, if high crude oil prices persist for a long period, there is a risk that the country’s finances will deteriorate, as other sources of funding will be needed.
