Rising Kerosene Prices Spur Electric and Gas Companies

By Masato Fukui, Kyodo News International, Tokyo

Nov. 10–TOKYO — The surge in kerosene prices in Japan is prompting electric power and gas companies to take the lead in providing home heating at stable prices.

The price of kerosene in October jumped 27 percent over the same month last year, hit by steep rises in the prices of crude oil. The rapid increase in prices of home heating oil meant the average household, which consumes about 587 liters of kerosene per year, had to pay an extra 8,600 yen.

“Aren’t (kerosene oil suppliers) jumping on the crude oil hike bandwagon (and raising the prices more than necessary)?” one person asked at a meeting in Tokyo in October of consumers and oil company executives.

Another person said, “The only defensive step consumers can take is to save money on kerosene.” Much of the criticism came from consumer group representatives from Niigata and Nagano prefectures, which are the two regions where residents use the most kerosene on the main island of Honshu in the winter.

Oil refinery executives said the rise in costs resulting from surging crude oil prices was more than their companies could cope with.

Electric power and gas companies, meanwhile, are gearing up their business strategies as they set their sites on ordinary homes.

Tokyo Electric Power Co. has refurbished its showroom in Tokyo’s Ginza district to publicize its “all electrification” system designed to cover all energy sources.

The company is showcasing floor heating systems and other heating devices that save energy. It also has staff on hand to explain the different heating systems.

“Electric bills are hardly affected by crude oil prices,” said TEPCO managing director Shigeru Kimura. “We’d like (consumers) to experience the advantage of electricity at all costs.” Industry sources said the strong point for electric and gas companies is price stability as the rates of electric and gas bills are set ease the effects of fluctuating crude oil and fuel prices.

An official at Tokyo Gas Co. said his company has been receiving many inquiries about the difference in costs between gas and kerosene fan heaters.

Nippon Oil Corp., Japan’s biggest oil refinery, reported that the sale of kerosene in October dropped 30 percent from the same month last year. Vice President Naokazu Tsuda said this was because many gas stations and consumers bought extra kerosene in anticipation of price hikes.

But his company is still busy. It is working to develop a fuel cell using kerosene as its next-generation product. The cell under development will not emit carbon dioxide to lessen burden on the environment. The company hopes to market it as its main product to replace kerosene next year.

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