Japan must cut excess refining capacity immediately

The Japanese oil refining sector cannot survive any longer in its current state and must cut excess capacity “immediately,” Petroleum Association of Japan President Akihiko Tembo said. Tembo said the Japanese downstream sector must address the excess refining capacity issue to secure “appropriate margins” capable of sustaining their businesses. Tembo said he expected Japan’s excess refining capacity to reach 1.5 million barrels per day (bpd) by Fiscal 2013-2014, from around 900,000 bpd today. Tembo’s forecast is bleaker than earlier industry estimates of an overhang of around 1 million bpd. Japan’s current refining capacity is 4.89 million bpd. (January 5, 2010)