Page 8 - AsianOil Week 04 2022

AsianOil EAST ASIA AsianOil

Japan’s largest

refinery to maintain

limited run rates

PERFORMANCE THE chairman of Eneos Holdings, Japan’s largest
oil refiner, announced this week that it will main-
tain its current run rate of between 70% and 80%
for the foreseeable future as Asia’s second-largest
economy waits to see how upcoming releases of
oil reserves affect markets in the region.
Speaking at a news conference, Tsutomu Sug-
imori said: “Local gasoline demand has almost
recovered to the pre-pandemic levels,” adding:
“(O)ur refinery’s run rate is expected to stay at
the current levels of between 70% and 80% for
the time being, although it will depend on how
far demand will recover.”
Earlier in the week, Japan’s government
decided on an unprecedented move to subsi-
dise oil distributors, possibly by January 27,
according to sources, as oil prices surged to their
highest levels in over seven years on the back of
concerns over limited supplies.
Compounding the predicament in the eyes
of the suppliers are numbers showing that
demand between April and September 2021
remained over 10% lower than pre-pandemic
levels, although numbers did pick up slightly
after October 1.
Sugimori went on to add that figures had
improved by the end of November, when sales
were just 5% down on the same month in 2019, 120% during the October to December period
and had bounced back to 2019 levels by the end compared to numbers posted in 2020, would
of the year. be hard to meet, as Eneos had only been able to
A huge increase in coronavirus (COVID-19) push up supply indicators by 60%.
The company cases across most of Japan is, however, causing Sugimori did offer a note of hope, saying:
concern and with the government in Tokyo “But we’ll be able to raise our supply by 50%
will also cease under pressure to reintroduce wide-reaching in the January to March quarter to meet all the
operations at lockdown measures from some quarters, Sug- demand” in a possible reference to an as of yet
imori said: “We are worried about widening unrealised release date of Japanese reserves,
its 127,500 restrictions to curb the spread of the Omicron or possible effects felt by a forecast February 1
coronavirus variant (that) may have a negative release of Chinese reserves.
barrel per day impact on demand.” In related Eneos news, the company will also
Adding to demand issues are forecasts by cease operations at its 127,500 barrel per day
(bpd) plant Japan’s Ministry of Economy, Trade and Industry (bpd) plant in Wakayama Prefecture, south of

in Wakayama (METI) that domestic demand for oil products, Osaka in central Japan, late next year.
Across Japan, Eneos currently operates 10 oil
in part on the back of a huge nationwide push
Prefecture. towards the electrification of vehicles, may have refineries.
The recent dip in demand as well as com-
already peaked, and will drop by 6% by 2025.
The same day the Eneos chairman spoke at petition from refineries primarily in China are
the news conference, the ruling Liberal Demo- believed to be significant factors behind the
cratic Party government announced that a lim- closure.
ited state of emergency caused by COVID would Eneos’ president, Katsuyuki Ota, addressed
be extended to a total of 34 of Japan’s 47 prefec- the closure in a statement, saying: “We cannot
tures, affecting the majority of the population. avoid population decline, the decarbonisation
Alluding to the recent oil crunch felt across trend and domestic demand for petroleum prod-
much of the East Asian region, Sugimori went ucts falling,” going on to say that the company
on to say that fuel oil demand, whilst increasing needed to again look at its 2040 vision plan.™

P8 www. NEWSBASE .com Week 04 28•January•2022