Japan’s JXTG raises weekly wholesale oil product prices by Yen 2,500/kl: sources

Highlights

JXTG’s base price for gasoline to be Yen 33,000/kl

Price rise to be effective Thursday

Tokyo —
Japan’s largest refiner, JXTG Nippon Oil & Energy, raised the weekly domestic wholesale base price for its five major rack petroleum products by Yen 2,500/kiloliter ($3.69/b), market sources told S&P Global Platts Wednesday.

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After the increase, JXTG’s base price for gasoline will be Yen 33,000/kiloliter this week, kerosene at Yen 35,500/kiloliter, gasoil at Yen 35,500/kiloliter, low sulfur A-fuel oil at Yen 34,000/kiloliter, and A-fuel oil at Yen 33,500/kiloliter, market sources said.

A-fuel is a blend of gasoil and fuel oil in a 90:10 ratio.

The rise in JXTG’s prices will be effective Thursday until May 27, for cargoes loaded by tank lorry, market sources said.

JXTG declined to comment on its wholesale prices.

Slow recovery in sight

Japan’s demand recovery for gasoline is slow despite the country partially lifting the nationwide-imposed emergency measures.

Japan on May 14 lifted the state of emergency measures imposed to curb the spread of COVID-19 in 39 out of 47 prefectures, with a planned follow-up review on May 21 to possibly lift measures for Tokyo, Osaka and six other prefectures, prior to the May 31 expiry.

The refinery has raised the wholesale prices by a total Yen 9,000/kiloliter over the past two weeks, despite the price increase, the reaction in the spot gasoline market seems to be limited.

“Spot prices for gasoline will stay well below the base prices,” said a local trader, adding that demand recovery will be delayed as the self-restraint lifestyle is not immediately normalized.

As of Tuesday, Japan’s domestic gasoline rack prices in Chiba, east of Tokyo Bay, stood at Yen 28,000/kiloliter, up Yen 2,000/kiloliter on the week, Platts data showed.

Japan’s domestic gasoline shipments were estimated at 15.16 million barrels in the four weeks to May 16, down 32.7% from a year ago, according to Platts calculations based on PAJ data.

JXTG adds Yen 1,000-1,500/kiloliter to its base prices when selling to traders and distributors, while gasoline stations that buy directly from JXTG have to add Yen 3,000/kiloliter to the base price, market sources said.

The refiner typically announces its weekly prices Wednesday for cargoes loading from the next day until the following Wednesday.

JXTG has a domestic market share of around 50% and its prices are closely tracked by two other major refiners in Japan — Idemitsu Kosan and Cosmo Oil.

The movement in JXTG’s domestic rack prices typically follows price trends in crude procurement costs instead of movements in global product prices, market sources said.

JXTG’s weekly prices typically track the week-on-week movement in crude oil procurement costs based on the daily average of the Platts Dubai and Oman crude benchmarks, market sources said.

The crude oil procurement cost increased by Yen 2,360/kiloliter on average over May 12-18, according to Platts calculations.

JXTG’S WEEKLY DOMESTIC WHOLESALE PRICE (YEN/KILOLITER):

Delivery period

Apr 30-May 13

May 14-20

May 21-27

Change

Gasoline

24,000

30,500

33,000

+2500

Kerosene

26,500

33,000

35,500

+2500

Gasoil

26,500

33,000

35,500

+2500

Low sulfur A-Fuel Oil 0.1%

25,000

31,500

34,000

+2500

A-Fuel Oil 0.5%

24,500

31,000

33,500

+2500

Source: Market sources

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