TOKYO (Nikkei) -- Japan's five leading oil refiners
have put plans in place to reduce their capacity by just over
20% in order to comply with a government regulation effectively
requiring them to do so by March 31 next year, The
Nikkei reported in its Thursday morning edition.
Top refiner JX Nippon Oil & Energy Corp. and the other
firms will lower their combined capacity by nearly 1.1 million
bpd from pre-regulation levels.
Domestic demand for such fuels as gasoline and diesel is now
estimated at around 3.4 million bpd. The overall refining capacity in Japan is
expected to drop from the pre-regulation 4.8 million bbl to 3.7
million bbl, tightening the supply-demand balance and improving
earnings at oil companies.
No. 2 refiner TonenGeneral will cut its daily capacity 16%,
from 661,000 bbl to just under 560,000 bbl. The firm will
shut down two of its six crude processing units, one each at
its Kawasaki and Wakayama refineries. It will continue
operations at those locations as well as at its third site, the
Sakai refinery, maintaining employment and
supply to clients.
Domestic demand for gasoline has been falling since 2004 on
such factors as the adoption of environmentally friendly
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