An increased demand for kerosene due to recent unusually cold weather has pushed retail prices of the heating oil to record highs.
As of Monday, the average retail price had risen 10 yen from the week before to 1,263 yen per 18 liters, about 20 percent higher than the previous year and the highest level on record, the Oil Information Center said Wednesday.
Experts say kerosene consumption increases by about 5 percent per each 1 degree drop in temperature.
Lower-than-average mid-December temperatures throughout Japan have added to the upward pressure drive on prices, which are already at high levels mainly due to recent spikes in crude oil prices.
Nippon Oil Corp. and other major distributors are close to deciding to raise wholesale prices in January by about 1 yen per liter, which would make it the first increase in three months.
Meanwhile, the key January futures contract has reached fresh record highs for the last few sessions at the Tokyo Commodity Exchange.
"Now we are just seeing the beginning of demand increases for kerosene," an industry source said, alluding to a further rise in prices in the new year. "So far, retailers have no need to reduce inventories."
