Page 13 - AsianOil Week 05 2022

AsianOil EAST ASIA AsianOil

Japanese government moves

to offset soaring oil prices

POLICY JAPAN’S Ministry of Economy, Trade and desired effect of pushing global prices down.
Industry (METI) last week gave the green light to On the domestic front, the markets in Japan
subsidies to help the nation’s oil suppliers offset this week saw contradictory figures released
costs linked to soaring crude prices. by two of its leading ministries concerning oil
With prices at the pump having reached imports, with METI announcing that imports
JPY170 ($1.48) per litre for the first time in of crude rose 0.5% compared to a year earlier to
over 13 years on January 24, the subsidies came 2.49mn barrels per day (bpd) – figures incorpo-
into effect on January 27, according to METI rating all crude imported by refineries, stockpil-
sources. ers and national oil terminals.
It is understood the subsidies will run until If accurate, this would be the first increase
the end of March, when the ministry will decide since 2012.
whether to continue mitigation of the indus- The nation’s Ministry of Finance, however,
try based upon the situation at that time, with also released figures showing that crude imports
METI having set aside JPY80bn ($700.7mn) actually fell by 1.12% in 2021, when compared
of the nation’s JPY55.7 trillion coronavirus against calendar year 2020; numbers some
(COVID-19) stimulus budget to help keep are finding difficult to comprehend given the
prices under control. global slump in imports throughout 2020, and
Those to benefit will include 29 Japanese into 2021, as COVID ravaged much of Japan’s The idea of
refinery companies, and oil importers worst domestic and global transportation infrastruc-
affected by increases over recent months in the ture, with nationwide lockdowns bringing subsidies to
fuel oil, gasoline and diesel sectors. domestic travel to a standstill as long-distance
The idea of subsidies to mitigate rising oil journeys were strictly controlled for extended mitigate rising
costs in Japan is not a new decision by the gov- periods, and international arrivals flying into
ernment, however, with Tokyo announcing in and out of the major cities dropped to 4mn in oil costs in Japan
November last year that if gasoline were to pass 2020, after an all time high of 32mn visitors in is not a new
the JPY170 per litre mark, help would be offered 2019.
by the central government. As such, the subsidies have been introduced decision by the
A blanket JPY3.40 per litre subsidy was pro- as much of the rest of East Asia goes into a week-
vided from January 27 to February 2, although long Chinese New Year holiday period, during government.
“not (as part of the government) aiming to lower which it is anticipated that China will release an
oil prices but to support the country’s industry as of yet undisclosed amount of its own strategic
sectors and household consumers, as well as to national reserves.
get used to the higher oil prices because of recent However, with Japan more typically aligned
stringer crude values”, a statement released by to the western January to December calendar,
the ministry said. and not affected by the closed markets and lim-
Subsidies will top out at a maximum of JPY5 ited business and travel taking place across the
per litre in increments of one yen every four rest of the continent, some analysts are watching
weeks across Japan should prices continue to to see whether it will be Beijing or Tokyo who
rise, and anticipated releases of national reserves blinks first by releasing national reserves to help
by China, the US and Japan fail to meet the alleviate public concern on rising prices.™

Week 05 04•February•2022 www. NEWSBASE .com P13