Japan's oil sales fall at fastest clip in 27 years

Japan's oil product sales last year fell at their swiftest pace in 27 years and consumption in December hit a 24-year low for the month, capping off a year in which a recession and diversification towards other fuel sources battered demand. Total petroleum product sales plunged 6.91 percent in 2009, matching the drop in 1982, the Ministry of Economy, Trade and Industry said.
That was generally in line with a fall of about 7 percent in a Reuters projection based on separate industry data. The world's third-largest oil consuming nation bought 193.33 million kilolitres, or 1.216 billion barrels, of refined oil products last year, the METI data showed, the lowest since 1987. Data for the month of December was not much stronger. Consumption slipped 1.0 percent from a year ago to 19.07 million kl or 119.95 million barrels, the lowest sales figure for the month since 1985, when it marked 18.88 million kl.
"We are likely to keep seeing this downtrend in oil product sales, given the overall weakness of consumption," a government official said. "The climate issue is also making it unlikely that even if the economy recovers, that would automatically lead to a rebound in oil product sales," he said.
Oil consumption in Japan has been declining over the past few years as the population ages and use of greener energy sources increases, but the fall accelerated considerably last year as the global financial crisis weakened demand from the nation's industrial sector. Moves by domestic industries, from photo film makers to paper manufacturers, to switch to environment-friendly natural gas for fuel for their plants' boilers, also hurt sales of petroleum products.
Sales of gasoline, which accounts for more than a quarter of demand, rose 0.3 percent last year helped in part by a government move last spring to cut highway tolls on weekends and some public holidays, leading many drivers to hit the roads. The data suggests that while motor fuel sales were firm from late spring to early autumn as people took advantage of the toll cuts, the discounts were not enough to offset weak demand in the other parts of the year. Gasoline sales in December dropped 1.4 percent to 5.21 million.