THE Japanese industry ministry said Friday it is considering creating a system for oil wholesalers and trading firms to share the extra costs of importing crude through routes that avoid passing the Strait of Hormuz.
The move is aimed at diversifying procurement sources in the resource-poor nation that has long heavily relied on the Middle East for its crude oil imports, over 90 per cent of which have transited the strait. But households could face higher gasoline prices if companies pass on the added costs.
The Economy, Trade and Industry Ministry presented the idea to a task force discussing ways to enhance the supply capacity of oil products. Details of the scheme will be discussed later.
It takes about 20 days to transport Middle East-produced crude oil, but around 50 days for tankers carrying US-origin oil via a route that passes near South Africa’s Cape of Good Hope, creating a challenge on how to bear additional fuel and personnel costs stemming from the longer journey. — Kyodo
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