Japanese oil refiners see long-term export growth potential

Japanese oil companies have begun to export fuel in significant volumes again, now that refining capacity has bounced back from the March 2011 tsunami. Fuel exports are expected to represent 10% of production, which is roughly the same level as before March 2011. The country’s monthly total is expected to reach 1.5 million kiloliters, valued at JPY100 billion (US$1.2 billion). Higher fuel exports would help improve the country’s balance of trade, but with fierce competition in Southeast Asia and other foreign markets, selling fuel abroad is less profitable than selling in Japan right now. Still, oil companies see growth potential over the longer term. Increasing exports will help develop foreign sales channels and revitalize domestic refining, which is running at slightly less than 80% of total capacity. Developing the export market will also require reorganizing production to cut costs. (April 10, 2012)