NEW DELHI/TOKYO — Japan’s gasoline imports are expected to remain elevated through August following a 20% increase in June, as refinery outages reduce production during the peak summer demand season, according to traders and analysts.
In June, Japan’s gasoline imports surged to 476,630 kiloliters, a 20.4% increase from May, the Ministry of Economy, Trade and Industry (METI) reported on Wednesday. This is equivalent to 99,930 barrels per day (bpd), up 24.5% from the previous month. In 2023, Japan’s average gasoline import rate was 55,168 bpd, based on METI data.
With refinery outages continuing and planned maintenance in place, Japan is expected to import between 120,000 and 130,000 bpd of gasoline in July and August. “This is mainly due to maintenance and recent outages,” said Priti Mehta, an analyst at Wood Mackenzie.
The increased imports from Japan are tightening gasoline supplies in Asia, which is supporting higher margins for refiners. Gasoline margins had already rebounded to a two-month high earlier in July.
A trader based in Singapore noted that Japan’s higher gasoline imports due to unplanned outages will lead to a decrease in the overall supply in the region. Cosmo Energy Holdings also confirmed it plans to boost its gasoline imports for July and August compared to the same period last year, though it did not provide exact figures.
Analysts say the significant rise in imports is linked to a forecasted drop in Japan’s refinery runs, expected to fall to 1.9 million bpd in June and possibly drop further to 1.7 million bpd in the following months due to unplanned shutdowns and ongoing maintenance.
Japan’s weekly refinery utilization rate fell to 63.6% in the week ending July 27, down from 66.2% the week before, according to data from the Petroleum Association of Japan (PAJ).
PAJ noted that the increase in imports is likely due to maintenance and outages at refineries owned by major companies like Eneos Holdings and Cosmo Oil during the high-demand summer months. Eneos declined to comment on the situation.
While there may be a rise in gasoline demand during the summer, overall consumption in Japan is expected to decline by 2% to 3% annually through 2028, according to a recent METI forecast. The decline is attributed to a shift toward next-generation vehicles, such as hybrids, and the increased fuel efficiency of gasoline-powered cars.
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