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Japan to use auction to ease rising energy costs

Japan to use auction to ease rising energy costs

Japan’s chief cabinet secretary Hirokazu Matsuno attends a press conference on December 23, 2021, during which he said US forces in Japan did not test their personnel for COVID-19 prior to their departure despite Tokyo requested so. Foreign Minister Yoshimasa Hayashi said that he had voiced “strong regret” to the commander of US forces Japan, Lt. Gen. Ricky Rupp. Photo: IC

Japan’s industry ministry said on Monday it will hold an auction on February 9 to sell about 100,000 kiloliters, or 628,980 barrels, of crude oil from its national reserve as a part of a US-led coordinated release of oil reserve to cool the current rising prices.

The supply, to be taken from its Shibushi tank in southwestern Japan, will become available to the winning bidder on March 20 or later, it said in a statement.

Japan’s government said in November that the government would release “a few hundred thousand kiloliters” of oil in response to a US request, and the sale would be done as part of a switch in the composition of the types of oil held in the national reserve.

“This is the first round of the planned releases and we will conduct more auctions when we are ready and while we closely watch the international energy markets,” an official at the ministry told Reuters.

Global oil prices have slipped by more than $5 a barrel since the ministry announced the plan in late November, as the spread of the Omicron coronavirus variant has raised concerns that fuel demand might decrease.

But industry minister Koichi Hagiuda said in earlier December that Japan’s oil release plan remained unchanged despite the drop.

The US Department of Energy said in earlier December that it will sell 18 million barrels of oil from the Strategic Petroleum Reserve, with offers from companies to purchase it due on January 4, as part of the release aimed at cooling fuel prices.