Press Conference by Minister Hagiuda (Excerpt)

*Note: This is a provisional translation for reference purposes only.

9:15-9:24 a.m.
Thursday, February 10, 2022
Press Conference Room, METI

Opening Remarks

Soaring Crude Oil Prices

Good morning.
I would like to say one thing at the start.
Today, a meeting of the related ministers was held under the Chief Cabinet Secretary to discuss our response to soaring crude oil prices.
I reported that METI has implemented an operation to respond to sudden fluctuations in oil product prices to minimize the surge in fuel prices, and has confirmed the positive effects of previous subsidies on curbing prices. I also told my peers that we are continuing to appeal to the ministers of energy of the UAE and the U.S., as well as other major oil producers, to increase production, and that we have had approximately 1,200 financial and management consultations since we established the special consultation desk for SMEs on November 2.
In addition, we will carefully examine what measures are effective from the viewpoint of minimizing the impact on people's lives and economic activities, taking into consideration the instructions given by Prime Minister Kishida on Tuesday of this week and the instructions given by the Chief Cabinet Secretary at the ministerial meeting this morning.
The staff in charge will explain more details in a briefing later, so feel free to ask questions.
That is all.

Question-and-Answer Session

Q: I have two questions concerning gasoline.
The national average price of gasoline published yesterday was 171.2 yen per liter, marking a second consecutive week of increase even after subsidies were provided. In Hokkaido, the price increased by 1.6 yen to 170.1 yen, exceeding 170 yen for the first time in 13 years, and the price of kerosene also increased by 2.3 yen.
You have been saying that you would not put into effect the trigger clause because the subsidy system would provide benefits for not only gasoline but also kerosene. Looking at these figures, I have to say that the subsidy system seems to have had a very limited effect on curbing prices, even though this is only the second week since it was implemented. First of all, please tell us your thoughts on this.
In addition, the upper limit of 5 yen for subsidies has been reached, and a ministerial meeting has also been held. Please tell us what specific matters were discussed during the meeting, such as raising the upper limit and putting into effect the trigger clause.

A: First, the national average of retail prices of gasoline was predicted to be 173.7 yen due to the rise in crude oil prices, and the current system has curbed the price by 2.5 yen to 171.2 yen. Similarly, we have confirmed that the price of kerosene was curbed from 113.9 yen to 111.4 yen, marking a 2.5-yen change.
The other day, I heard from local communities in Hokkaido expressing their appreciation for including kerosene in the subsidy system.
On the other hand, retail prices of gasoline, kerosene, and other products naturally differ by region due to management strategies, inventories, transportation costs, and other factors. I understand that this 2.5-yen curbing effect is not uniform across the country, and it varies by region. I have already said this, but I would like to reiterate that this system is aimed at minimizing further surges, not at lowering prices.
In addition to a full survey of gasoline stations, METI plans to conduct on-site surveys starting next week of businesses that are raising prices despite the fact that wholesale prices are fixed. We will confirm the circumstances of individual gasoline stations to see if their prices are set in accordance with the aim of this project, then do a careful follow-up.
Based on that, we currently do not intend to increase the upper limit of subsidies or put the trigger clause into effect. However, the government as a whole will carefully examine what measures are effective from the viewpoint of minimizing the impact on people's lives and economic activities while assessing how long these soaring crude oil prices will drag on and exploring every option without exception. We will do so based on the instructions given by Prime Minister Kishida on Tuesday and the Chief Cabinet Secretary this morning.
At this morning's meeting, efforts made by the ministries and agencies concerned were reported. It was also confirmed that the government as a whole will continue to thoroughly examine the issue. I am currently not in a position to indicate what specific measures will be taken in the future. METI is considering what measures will be effective from various viewpoints, such as minimizing the impact on people's lives and economic activities.

Q: Concerning that, Prime Minister Kishida held a telephone meeting with the President of Iran last night. Although it was a summit meeting, and it seems that the main theme was the nuclear agreement, please tell us if you are aware of anything they discussed, including the possibility of increasing production of crude oil in response to the soaring prices.
Also, apart from the summit meeting, you have said that you will appeal to oil producers to increase their production of crude oil. Please tell us if that includes Iran.

A: At today's ministerial meeting, there was no mention of requesting Iran to increase production. I am aware that during yesterday's summit meeting, they discussed negotiations over restoring the nuclear deal that are still ongoing, and there were comments about how Japan has consistently supported the nuclear deal as well as our expectations that related countries will return to the deal soon. Japan has not made any requests for Iran to increase production and is not making such a request as of today.