Fuel price hikes due to the U.S.-Israel-Iran conflict are placing significant cost pressures on livelihood industries in the Philippines and New Zealand, which are heavily dependent on imported energy, while also driving the growth of the new energy vehicle market.
In various gas stations across Manila, the Philippine capital, diesel prices have surged more than twice the levels seen at the end of February, with increases also noted in liquefied petroleum gas (LPG) prices.
Businesses such as restaurants and vendors relying on LPG have expressed concerns over escalating costs, fearing they may soon be unable to cover their expenses.
"The cost of our goods has gone up. Our income has decreased as a result. The money we earn is barely enough to cover restocking, let alone pay our employees' wages," said Rey, a food vendor.
In Auckland, New Zealand, a senior executive at a local car dealership said the surge in fuel prices is prompting more consumers in the country to shift from conventional cars to new energy vehicles.
"(Fuel price hike) really has increased the sale of our electric vehicles, particularly battery electric vehicles. Consumers are now experiencing battery electric vehicles. They see their economic advantage. It's good for the market. It's also good for New Zealand in terms of sustainability," said Simon Rutherford, CEO of Auto Distributors New Zealand, a division of Armstrong Motor Group.
Fuel price hikes squeeze livelihoods in energy-importing Philippines, New Zealand
A Japanese expert warned that rising oil prices are beginning to slow Japan's economic recovery and push up overall prices, and that tapping national oil reserves is not a long-term solution.
Japan will start releasing oil from state reserves on Thursday as concerns over supply mount amid the ongoing U.S.-Israeli strikes on Iran.
The measure, announced by Prime Minister Sanae Takaichi during a meeting of relevant Cabinet members to discuss ways to cushion the impact of the tensions in the Middle East on the Japanese economy, comes after Japan started releasing oil from private-sector stockpiles last Monday.
Masatoshi Kojima, a professor in the Department of Business Administration at Momoyama Gakuin University, said the policy assumes the Middle East crisis will end soon; if it doesn't, the policy will require a dramatic adjustment.
"In fact, I don't believe that the current policy (of releasing oil reserves) is sustainable in the long term. The policy currently rests on the assumption that the crisis in the Middle East will end soon. If it drags on, I think the policy will need significant adjustment," said Kojima.
On the economy, Kojima warned that continued rises in crude oil prices would put long-term pressure on Japan.
"The Japanese economy is recovering steadily, but ongoing Middle East tensions could have a major impact. If the crisis is resolved quickly, the damage will be limited. However, given the uncertainty, if consumers and investors start cutting back, the economic fallout could be far greater than expected even after the tensions end," said Kojima.
Releasing state oil reserves not long-term solution for government: Japanese expert
