Japan to follow US in releasing oil reserves to contain increasing petroleum prices

Japanese Prime Minister Fumio Kishida on Saturday, November 20, announced that his government is mulling over releasing oil from its reserves. The decision by Japanese authorities follows the United States and other countries' move to curb the rising crude oil prices, reported Kyodo News.

Speaking to reporters in Matsuyama, Prime Minister Fumio Kishida made the announcement about the possibility as the price of gasoline and other fuel products are rising and companies have already been affected due to the COVID pandemic.

Some of the people in the Japanese government have warned against the decision to release oil reserves. They have cautioned the government against releasing oil reserves at times other than supply shortages, Kyodo News reported citing officials.

As per the report, the Japanese government has not resorted to releasing crude oil reserves due to the increase in fuel prices. Previously, the government only considered the measure when it faced natural calamities or unstable political situations overseas that resulted in supply issues.

Japan considers release of oil reserves

Japan is dependent on oil-producing countries in the Middle East for 90% of its oil consumption. However, the Japanese authorities started having crude oil reserves in the 1970s. In late September, Japan possessed oil reserves sufficient for 242 days of domestic consumption, as per Kyodo News.

Reportedly, the oil in Japan is kept at state-owned oil reserves and private firms' oil reserves. Earlier on Friday, the Japanese government approved an economic stimulus package with 55.7 trillion yen in fiscal spending. The package approved by the Kishida cabinet included a subsidy program for oil wholesalers and importers to prevent the rise in the price of gasoline and kerosene after they reach a certain level to reduce the financial burden.

US administration in discussions with other countries

White House Press Secretary, Jen Psaki, on Friday, November 19, responded to questions about the coordinated release of emergency stockpiles alongside China, Japan, South Korea. She did not have any update on the matter. Speaking at a press briefing, Psaki further stated that the US administration has been in discussion with various officials and leaders from countries including China. She added that they have been in touch with oil producing countries to maintain enough supply of oil.

Image: AP/PTI