TOKYO -- JX Nippon Oil & Energy Corp. is considering shutting down oil refinery operations at its Muroran plant in Hokkaido by the end of March 2014, Kyodo news reported Sunday, citing sources close to the matter.
JX Nippon will keep the Muroran refinery as a manufacturing plant for petrochemical products and keep its employees through job displacement, the report cited the sources as saying.
The company has already cut its daily output by 400,000 bbl from 2008 and has now decided to cut output by an additional 200,000 bbl by the end of March 2014.
By shutting down the Muroran plant, the company will cut 13% of its group refinery capacity, which is equivalent to a daily output of 180,000 bbl, the report said.
The government is requiring oil wholesalers scale down refinery capacities by the end of fiscal 2013 amid stagnant domestic demand for gasoline due to the increase in the number of electric cars and fuel efficient vehicles as well as declining automobile sales.
JX Nippon issued a statement Sunday denying it had made a firm decision on the refinery "at this point."
Dow Jones Newswires