The country's average gasoline price dropped 11 cents per liter -- roughly 41 cents per gallon -- with removal of a 25-cent-per-liter tax.

Gas prices in Japan exceeded $1.50 per liter or roughly $5.64 per gallon in January.

Retailers were dropping prices, although some still have inventories on hand that are subject to the tax, Kyodo reported.

The Hokkaido region on northern Japan saw gas prices drop by 19 cents per liter, the equivalent of 71 cents per gallon.

Diesel fuel prices also dropped. The tax, which expired amidst a political debate on the country's budget, helps fund road and highway projects.