Japan Now: Refinery Capacity and Fuel Stocks Plunge, Petrol Prices Soar!

The impact of geopolitical conflict in the Middle East is now being felt acutely in Japan. Supply disruptions to oil caused by the Israel-Iran war have led to a significant decline in refinery capacity and fuel stocks in Japan.

Citing Reuters on Wednesday (18/3/2026), based on data from the Japan Oil Association released on Wednesday, Japan’s refinery utilisation rate fell to 69.1% in the week ending 14 March 2026. This figure is down from 77.6% in the previous week and well below the normal level of over 80% prior to the conflict.

Japan’s petrol stocks fell by nearly 10%. In addition, kerosene stocks plunged by up to 12%, jet fuel declined by 3%, and diesel shrank by around 1%.

Meanwhile, liquefied natural gas (LNG) stocks experienced an increase. Data from Japan’s Ministry of Economy, Trade and Industry shows that reserves of LNG held by major utility companies rose to 2.3 million metric tonnes as of 15 March, up from 2.12 million tonnes in the previous week, and above the average for the same period last year.

The average petrol price in Japan rose to 190.8 yen ($1.20) or approximately Rp 20,306 (assuming Rp 106.43 per yen) per litre on 16 March, up 18% from the previous week and the highest price at least since 2022, according to the Ministry of Economy, Trade and Industry.

To curb the price rise, starting from 19 March, the government will begin subsidising petrol prices with a tariff subsidy of 30.2 yen or equivalent to Rp 3,214 per litre.

Prime Minister Sanae Takaichi has pledged to keep the average petrol price around 170 yen or approximately Rp 18,092 per litre, and has also ordered the release of part of the emergency oil reserves to help mitigate the impact of the Middle East crisis.

The government has also asked Japanese oil refineries to use the released crude oil, which will reduce national reserves by 17%, to secure domestic supplies.