TOKYO, Mar 12 (News On Japan) - Japan plans to release petroleum reserves as early as March 16 in response to surging crude oil prices driven by escalating tensions in the Middle East, with the government also aiming to keep the nationwide average gasoline price at around 170 yen per liter.
Prime Minister Sanae Takaichi announced that Japan would move ahead with the release of its oil reserves without waiting for a formal international agreement.
"We have decided that Japan will take the initiative in easing supply and demand in the international energy market by releasing reserves as early as March 16, rather than waiting for an official decision on a coordinated international release," Takaichi said.
Speaking on March 11, Takaichi explained that Japan currently holds reserves equivalent to 254 days of supply and plans to begin the release by tapping 15 days' worth from private-sector reserves and about one month from government-controlled stockpiles.
The prime minister also warned that rising crude prices could push gasoline prices above 200 yen per liter, instructing Economy, Trade and Industry Minister Yoji Muto to swiftly implement emergency measures to cushion the sudden surge in fuel costs.
Under the plan, the government will attempt to keep the average retail price of gasoline at around 170 yen per liter nationwide. Similar measures will also apply to diesel, heavy oil, and kerosene. Funding will come from the remaining balance of the government's Fuel Oil Price Volatility Mitigation Fund.
An official from the Ministry of Economy, Trade and Industry said that if disruptions continue, shipments from the Persian Gulf passing through the Strait of Hormuz toward Japan could effectively stop after around March 20.
"If the situation continues, ships heading to Japan through the Persian Gulf and the Strait of Hormuz will disappear after around March 20, and crude oil supplies to Japan would drop sharply," the official said.
According to the ministry, if the closure of the Strait of Hormuz persists, there would be no alternative shipping routes for more than a month, prompting Japan to release reserves independently.
Meanwhile, anticipating further gasoline price increases, the government will introduce new subsidies starting with shipments from March 19. Any portion of gasoline prices exceeding 170 yen per liter will be fully subsidized.
Source: TBS
