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Japan’s refined products demand to fall 1.7 pct per year through 2022/23

Japan’s oil products demand, excluding fuel oil used for power generation, is projected to fall 1.7 percent per year on average over the next five fiscal years through 2022/23, forecasts by the government’s energy committee showed on Thursday.

The drop will be led by fast-declining sales of fuel oil, kerosene and gasoline.

Oil demand will likely fall 2.4 percent to 2.85 million barrels per day (165.252 million kilolitres) in the financial year that started April 1 from the year before, the committee under the Ministry of Economy, Trade and Industry said in its annual five-year outlook.

The committee did not make demand projections for C-type fuel oil used for power generation amid the prolonged shutdowns of most of the nuclear plants, seven years after the Fukushima Daiichi plant disaster.

The committee also did not take into account upcoming rules by the International Maritime Organization that will slash the amount of sulphur emissions that ships worldwide are allowed to burn from 2020.

Fuel oil consumption for power generation is, however, expected to continue its decline as some utilities have mothballed oil-fired power units recently.

The following is the committee’s projection of average oil products demand forecast per year through the financial year 2022/23, compared with the estimates for the fiscal year ended March 31. Volumes are in 1,000 kilolitres. (1 kilolitre is equal to 6.2898 barrels.

                         Oil product  Estimate    y/y   Outlook    y/y   Outlook    y/y        Ave.      Growth
                                Type    FY2017    Pct    FY2018    Pct    FY2022    Pct  y/y growth  over 5 yrs
                            Gasoline    51,686   -1.6    50,591   -2.1    45,929   -2.7        -2.3       -11.1
                             Naphtha    45,337   +1.2    44,561   -1.7    42,966   -0.8        -1.1        -5.2
                                 Jet     5,240   -1.0     5,234   -0.1     5,190   -0.1        -0.2        -1.0
                            Kerosene    16,936   +4.3    15,486   -8.6    13,965   -2.6        -3.8       -17.5
                             Gas oil    33,678   +1.1    33,726   +0.1    33,776   +0.1        +0.1        +0.3
                          A fuel oil    11,404   -4.9    10,916   -4.3     9,556   -2.9        -3.5       -16.2
 B, C fuel oil (except power output)     5,090   -7.7     4,738   -6.9     3,846   -4.3        -5.4       -24.4
       Total (except fuel for power)   169,371   -0.2   165,252   -2.4   155,228   -1.5        -1.7        -8.4
    C fuel oil used for power output     4,865  -33.0                                                          
                   Total oil product   174,236   -1.5                                                          

Source: Reuters (Reporting by Osamu Tsukimori; Editing by Gopakumar Warrier)

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