Press Conference by Prime Minister TAKAICHI Sanae regarding the Situation Surrounding Iran

Reporter: I am Munemoto from Fuji TV. Madame Prime Minister, during the March 9 House of Representatives Budget Committee meeting, you stated that, regarding measures to address the surge in gasoline prices following the deteriorating situation in the Middle East, “I believe many citizens are concerned. We will implement necessary measures in a timely manner.” Also, yesterday, the Liberal Democratic Party held a joint meeting of relevant party committees regarding the situation surrounding Iran and began considering responses to the recent situation in Iran. Could you tell us the current status of the government’s consideration?    

Prime Minister Takaichi: Thank you. During last year's extraordinary Diet session, placing foremost priority on responding to the rise in prices now facing the Japanese people, we abolished the provisional tax rates and achieved lower prices for gasoline and diesel fuel, grounded in the supplementary budget we passed.

However, the current situation in Iran has resulted in sharp rises in the price of crude oil recently, and at the beginning of the week we saw prices approaching US$120 per barrel. I should mention that while today's crude oil prices have settled at roughly US$90 per barrel, we cannot rule out the possibility of the price of gasoline exceeding a level of 200 yen per liter.

Given this state of affairs, in order to protect the daily lives and the economic activities of our citizens, I have instructed Minister of Economy, Trade and Industry Akazawa to immediately carry out emergency measures to curb dramatic price fluctuations.

For reference, in the one year before I assumed this post, the average retail price of gasoline was 178 yen per liter. In the future, should crude oil prices rise, the price of gasoline is expected to increase, but even in such a case, we will keep the retail price in check at a nationwide average of about 170 yen, and have also made the decision to take similar steps with regard to diesel oil, heavy oil, kerosene, and so on.

We will utilize the balance remaining in the Fuel Oil Price Stabilization Fund. Furthermore, after that, we will take all necessary measures while also keeping a watchful eye on developments in the Middle East situation as well as crude oil price levels affected by those developments.

Insofar as the future of the situation in the Middle East remains precarious, going forward, we will continue to maintain flexibility as we examine the ways in which we should extend support so that, even if the situation becomes prolonged, we will be able to support the daily lives of the Japanese people in a sustained way without losing momentum.

In addition, the situation in which crude oil tankers have effectively been unable to pass through the Strait of Hormuz is still ongoing. We expect that Japan's crude oil imports will decline dramatically beginning from late March. 

Among countries of the world, Japan has an exceptionally high degree of reliance on the Middle East, resulting in significant impacts for us. We intend to utilize our national petroleum reserves as we coordinate with the other G7 countries and the International Energy Agency (IEA) to ensure that no disruptions arise in the supply of gasoline and other petroleum products under any circumstances.

Taking the initiative, and with a view to easing the supply-demand situation in the international energy markets, Japan has decided to begin releasing our reserves from as early as March 16, without waiting for an official decision on an international release of reserves taken in coordination with the IEA.

This will begin with the release of 15 days' worth of privately-held reserves; alongside this, in the near term, we will release one month's worth of national reserves and deliver them to domestic refining companies at the earliest possible time. In addition, we will expeditiously utilize reserves jointly held with oil-producing nations.

I will have the Ministry of Economy, Trade, and Industry explain these decisions in greater detail.  I will end my opening statement here.