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Press Conference by Minister Hagiuda (Excerpt)

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

8:43-8:49 a.m.
Friday, March 4, 2022
First floor lobby, Annex to the House of Representatives

Opening Remarks

Bill to Revise the High Pressure Gas Safety Act and Other Acts

I would like to say four things.
A Cabinet Decision was made today on the Bill for Partial Revision of the High Pressure Gas Safety Act and Other Acts
This bill revises regulatory systems for industrial safety with three pillars: first, promoting smart industrial safety that utilizes technology; second, responding to the risk of accidents associated with the increase in small-scale solar power generators; third, promoting the introduction of fuel cell vehicles and others. This is based on environmental changes including innovative technological progress and security personnel shortages in the industrial safety sectors such as electric power and gas. We will make every effort to enact this bill quickly.
The administrative staff will explain the details later.

Soaring Crude Oil Prices

Second, a ministerial meeting was held today to discuss our response to soaring crude oil prices, and we arranged an emergency response. METI has decided to use this fiscal year's reserve funds of 350 billion yen to raise the upper limit on the amount of money it will pay to curb prices from the current 5 yen to 25 yen per liter, as an emergency relief measure. Regarding the collective release of a total of 60 million barrels of oil reserves by IEA Member Countries, Japan plans to release 7.5 million barrels from its stockpiles held by the private sector—the second largest quantity to the United States—and will continue cooperating with major consumer countries to urge oil producing countries to increase their production.
We are also working to reduce interest rates on Japan Finance Corporation's Safety-Net Loans and facilitate pass-throughs for SMEs and encouraging citizens to strive even harder than before to reduce their oil and gas consumption. Furthermore, we are promoting the popularization of clean energy vehicles and energy conservation in order to support the transition of energy supply and demand structure.
The administrative staff will also give details on this at a briefing later.

Stimulus Package for SMEs

Third, we formulated a stimulus package for SMEs today that continues the COVID-19 financing support from the last fiscal year that is helping SMEs stay in business. It also encourages profitability improvements, business revitalization, and second chances for SMEs that are suffering due to increasing debt. First, we will make every effort to ensure financing for SMEs by extending the deadlines for Japan Finance Corporation's substantially interest-free loans and Shoko Chukin Bank's crisis-response loans from the end of the fiscal year to the end of June, in addition to extending the repayment period from 15 to 20 years.
Next, to respond to increasing debt, we will strongly promote comprehensive support measures that include establishing the Small and Medium Enterprise Vitalization Council to provide unified support for business revitalization, profitability improvements, and second chances based on the Guidelines for SME Business Revitalization. These guidelines are non-governmental rules that exist to support SMEs in formulating and implementing their plans to improve profitability and facilitate their voluntary liquidation, which will be done by utilizing over 30,000 certified support organizations nationwide. The administrative staff will explain the details later.

Pass-through Measures

Finally, given that the prices of crude oil, raw materials, and other items are increasing, Prime Minister Kishida held a ministerial discussion after the Cabinet meeting to instruct me and other relevant ministers to accurately grasp the pass-through situations in industries under our jurisdiction and once again request cooperation on pass-throughs with business associations. This month is a price negotiation promotion month. In accordance with the prime minister's instructions, METI will continue making every effort to implement pass-through measures, including intensive hearings by our special staff monitoring subcontracts as well as seeking cooperation from business associations.
That is all.

Question-and-Answer Session

The Situation in Ukraine

Q: I have two questions.
Following Sakhalin 2, one of Japan's partner companies has decided to withdraw from Sakhalin 1.
ExxonMobil, which has announced withdrawal from Sakhalin 1, is the operator of the project. Therefore, this project is expected to experience more difficulties in continuing operation than Sakhalin 2. Please tell us about your thoughts on the significance of this project and whether METI plans to do anything for the project's continuation.
My other question is about the situation in Ukraine. Honda and Toyota are responding to the situation by halting their vehicle exports to Russia. There is also concern that settlement of transactions may become impossible as Russian banks have been excluded from SWIFT. About half of Japan's exports to Russia are being done by automobile-related industries. Please tell us about your thoughts on how this will impact the Japanese automobile industry and how METI plans to respond.

A: As we depend on the Middle East for 90% of our crude oil imports, Sakhalin 1 is an important project for Japan given the increasingly unstable global crude oil supply and demand structure. We will collect information and carefully assess the implications of ExxonMobil's withdrawal for the stable supply of energy.
As international efforts to strengthen sanctions on Russia continue, Japan intends to respond appropriately in cooperation with the G7 while prioritizing a stable energy supply and energy security as the national interests to be protected to the maximum extent possible.
Regarding your question about SWIFT and automobiles, I believe this situation will inevitably have various effects on Japanese companies. I understand that automobile companies have made an unavoidable decision to halt their production and exports due to logistical difficulties and other factors. The government will continue gathering information on the status of business activities in relation to Russia and make every effort to minimize impacts on corporate activities while working closely with the industrial world.

Last updated:2022-03-24