There are ongoing reports of fuel shortages across northern Japan.
However, as we pointed out previously, Japan’s inventory stock is actually pretty well positioned to deal with these sorts of shortages. Hence — if the problem lies anywhere — it is with the internal distribution network.
All of which makes this little news story from Reuters on Thursday rather interesting (H/T Josh Noble on Beyond Brics):
BEIJING, March 16 (Reuters) – China will give 10,000 tonnes of diesel and 10,000 tonnes of gasoline free to Japan to help the country battle shortages, the Xinhua news agency said on Wednesday. State oil firms PetroChina and Sinopec will provide the fuel to Japan, Xinhua said, adding that China will offer more aid based on the needs of Japan. China has already donated 30 million yuan ($4.56 million) of relief supplies to Japan, the first batch of which has already left Shanghai, including
10,000 metric tonnes in the grand scheme of things is nothing in terms of supply, all of which makes the above (in our humble opinion) more publicity stunt than helpful maneuver.
There are, after all, 313 gallons in one metric tonne of diesel. Say an average car takes 20 gallons, that equals a load capable of filling up 156,450 cars.
Not really that much.
Furthermore, we should add, JBC Energy reports that Japan’s own refining system is well on its way back to normal operations.
As they noted on Thursday:
There was a welcome ray of light for Japan’s refining industry on Wednesday with the announcement that three of the six shut-in refineries are expected to be back online and running at full tilt as soon as next week. Kyokuto Petroleum’s 175,000 b/d Chiba refinery has already returned onstream while TonenGeneral’s 335,000 b/d Kawasaki plant is expected to restart operations today; JX’ 270,000 b/d Negishi refinery is expected to follow suit sometime next week. Together the three plants account for more than half of the shut-in refining capacity and if we factor in the falling seasonal trend in Japanese refinery runs (end-March 5-year average is just 82%) and the fact that other plants are ramping up rates to make up for the shortfall, it is likely that the nation’s refining industry will not suffer any capacity-related restrictions after the end of March (see chart).
That little dip should have been well covered by inventories.
So, if help is needed anywhere it’s with sorting out the distribution networks.
Related links:
Japan live blog – day seven – FT
Time to start watching the uranium-fossil spread – FT Alphaville
Euro nuclear, paralysed and paralysing - FT Alphaville
The UK’s Japanese natgas exposure - FT Alphaville