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mbarkerFascinating month. As I understand it, last month, gas prices dropped here in Japan because the government couldn't agree on extending the taxes. So they took 25 yen per liter taxes off the price, dropping the price an average 20 yen (according to reports, and my own eyeballing). That's the first step.
Then the other day, the government rammed through a tax package, just in time for the holiday week. And prices bounced up, from around 126 yen to 156 yen per liter. Yes, adding back the 25 yen tax increased the price about 30 yen per liter. That's the second step.
The news report this morning indicates that while everyone who could bought gas over the weekend, right now the gas stations are almost deserted.
My own reading of this indicates that in dropping and then adding back about 25 yen of taxes, the gas companies managed to hit us with about a 10 yen per liter rise in prices -- and make it seem as though the government did the fiddling, not them.
That's actually pretty good business. Take 25 yen off, but only pass 20 yen savings to the customer -- it still feels like a significant savings to the customer, even though you've raised the price 5 yen. Then add back the 25 yen, and increase the price to the customer by 30 yen -- now the customer is enraged, but blames it on the government, not the poor gas company. Slick! Caught us coming and going.
Then the other day, the government rammed through a tax package, just in time for the holiday week. And prices bounced up, from around 126 yen to 156 yen per liter. Yes, adding back the 25 yen tax increased the price about 30 yen per liter. That's the second step.
The news report this morning indicates that while everyone who could bought gas over the weekend, right now the gas stations are almost deserted.
My own reading of this indicates that in dropping and then adding back about 25 yen of taxes, the gas companies managed to hit us with about a 10 yen per liter rise in prices -- and make it seem as though the government did the fiddling, not them.
That's actually pretty good business. Take 25 yen off, but only pass 20 yen savings to the customer -- it still feels like a significant savings to the customer, even though you've raised the price 5 yen. Then add back the 25 yen, and increase the price to the customer by 30 yen -- now the customer is enraged, but blames it on the government, not the poor gas company. Slick! Caught us coming and going.
