Japan to Release State Oil Reserves Thurs.

Tokyo, March 24 (Jiji Press)–The Japanese government said Tuesday that it will start releasing national oil reserves equivalent to 30 days of domestic consumption, or about 8.5 million kiloliters, in stages from Thursday. The government also decided to additionally allocate 800.7 billion yen from its fiscal 2025 budget reserves to fund gasoline subsidies and other aid programs. Through the moves, the government aims to ensure a stable supply of oil products and curb gasoline prices to prepare for a possible prolonged blockade of the Strait of Hormuz, a major transportation route for Middle East crude oil, amid lingering tensions in the region following the conflict between U.S.-Israeli forces and Iran. Over 90 pct of Japan’s crude oil imports comes from the Middle East. The de facto blockade has prevented tankers from passing through the strait, meaning that Japan’s crude imports will likely begin to fall drastically soon. Against the background, the government will release its oil stockpile for the first time since 2022, just after Russia started its full-scale military aggression against Ukraine in late February that year. The Japanese private sector began releasing 15 days’ worth of oil reserves March 16. The combined amount of state and private-sector oil reserves to be released this time will likely be the largest ever. The government-stockpiled oil will be released from 11 facilities in the country, such as those in the northernmost prefecture of Hokkaido and the southernmost prefecture of Okinawa, and sold to four oil wholesalers, including Idemitsu Kosan Co., for a total of about 540 billion yen. Japan will also release for the first time reserves held jointly with oil-producing countries such as Saudi Arabia. By the end of this month, five days’ worth of oil will be released from the reserves. At a press conference Tuesday, industry minister Ryosei Akazawa said that the Middle East situation will have “no immediate impact on Japan’s oil supply-demand condition.” “We will closely monitor the situation and take all possible measures to secure a stable energy supply,” he stressed. From its fiscal 2025 budget reserves, the government will allocate 794.8 billion yen to its fund for subsidies for gasoline and 5.8 billion yen for subsidies to taxi operators using liquefied petroleum gas. On Thursday last week, the government resumed subsidies to oil wholesalers, with the aim of lowering the country’s average retail price of regular gasoline to around 170 yen per liter. It initially planned to provide the aid using some 280 billion yen remaining at the gasoline subsidy fund. As lowering the pump price to 170 yen from 200 yen would require 300 billion yen per month, however, the government decided to bolster the fund to prepare for the possibility that the Middle East tensions will continue for an extended period. END [Copyright The Jiji Press, Ltd.]