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Japan could export petrol in summer
This year, however, Japan has been a net gasoline exporter every month since December, with shipments hitting 710,000 barrels in March, the highest in nine years, data show.
- Reuters
- Published: 00:30 May 2, 2008
Tokyo: Japan's historic dependence on imported gasoline to meet peak summer demand may draw to a close this year, as steadily falling domestic consumption takes an extra hit from the reimposition of a fuel tax.
Petrol use in the world's third-largest oil consumer traditionally picks up from the start of 'Golden Week' holidays this week, and can rise by 5-10 per cent from the annual norm. But that seasonal swing has ebbed as high prices take their toll on driving holidays and push buyers toward more fuel-efficient cars.
While its trading volumes are small, Japan's switch from importer to exporter would add pressure to a global gasoline market already in the doldrums due to declining US demand and facing a surge in new supply from India this summer.
"A move to export more oil products overseas will be a trend considering falling demand at home," said Kaname Gokon, research section manager at Okato Shoji Co Ltd.
For decades, Japan, which uses about one-tenth as much gasoline as the top consumer, the US, has consistently imported extra gasoline throughout the year, with purchases peaking in the summer at two million barrels a month or more.
This year, however, Japan has been a net gasoline exporter every month since December, with shipments hitting 710,000 barrels in March, the highest in nine years, data show.
Net imports during the peak summer months of June to August have fallen every year since a record high of 21,000 bpd in 2004, slumping to just 5,700 bpd last summer.
Japan's switch from rising to falling gasoline demand has been well charted since it began two years ago, caused by a combination of a shrinking, ageing population, higher prices and ready acceptance of smaller, fuel-efficient cars. Consumption dropped by 1.7 per cent to 59.81 million kilolitres (1.03 million barrels per day) last year; sales of hybrid cars by Toyota rose 13 per cent.
Blow
The biggest blow to demand came from the legislature, where the ruling coalition reintroduced a gasoline tax that was suspended on March 31. Opposition lawmakers had initially rejected renewing of the tax. But the lower house restored the tax on Wednesday.
Economists say consumers are likely to respond sharply to the sudden rebound in prices, which could surge nearly 25 per cent overnight back to 160 yen ($1.54). "If gasoline prices rise back to about 150-160 yen [a litre], people will start using trains instead of cars especially for people living in urban areas," said Akira Kamiyama, a derivatives trader at Mitsui & Co.
indicators
outlook remains bleak
On top of sharply higher prices, consumers will have to weigh up a darkening economic outlook this year. Japanese consumer confidence hit a five-year low last week in the latest signs of trouble for the world's second-largest economy.
"Increasing uncertainty about the Japanese economic outlook could restrain consumption," an analyst at a European bank said. "People are starting to get used to not using a car, having seen gasoline prices rise relentlessly over the last few years."
- Reuters
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