Press Conference by Minister Akazawa (Excerpt)

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

9:47-9:59 a.m.
Tuesday, June 2, 2026
Press Conference Room, METI Main Building

Opening Remarks

Storage Battery Industry Strategy Promotion Council

First, I would like to make a brief announcement. Today, a meeting of the Storage Battery Industry Strategy Promotion Council will be held, in which we will submit a draft to revise the Storage Battery Industry Strategy, formulated in 2022, into the Storage Battery and Power Source Industry Strategy, and have the council deliberate on it. While structural oversupply has become apparent recently, there is a growing need to provide comprehensive storage battery solutions to growth markets, such as AI data centers. Under the circumstances, at today's meeting, we will present our goal of establishing a manufacturing base for power source systems, primarily storage battery systems, that possess diversified competitiveness, and of tripling the storage battery-related sales of Japanese companies in 10 years. The council will deliberate on the revised strategy.

Question-and-Answer Session

Release of oil stocks due to the situation in Iran

Q: I would like to ask about the additional release of oil stockpiles. Minister, you observed a stockpiling base in Kagoshima Prefecture on Sunday. At the meeting of the relevant Cabinet ministers held last month, it was decided that no decision will be made regarding the third round of releases during that month. However, while alternative procurement is progressing, the situation regarding an agreement between the United States and Iran remains uncertain. Given these circumstances, could you please share your current thoughts on the schedule and duration for stockpile releases going forward? Thank you.

A: The day before yesterday, I visited the Kiire Terminal in Kagoshima Prefecture, from which our oil stockpiles are released. I observed the frontline operations and gave encouragement to the highly motivated workers there. Regarding crude oil, we expect to be able to secure alternative procurement for approximately 80% of our needs in June. Using the stockpiles approved for release to date, we anticipate securing the necessary supply for June. Therefore, we decided against a third round of national stockpile releases in May. Under these circumstances, even assuming a conservative scenario in which this 60% alternative procurement rate continues, we expect to be able to secure a stable supply of oil beyond the end of the fiscal year, until next spring. Regarding future releases of stockpiles, decisions will be made as needed, while monitoring the status of alternative procurement. In any case, we intend to continue promoting alternative procurement and limit the release of stockpiles while securing the amount needed for Japan as a whole.

Bottlenecks in the distribution of petroleum products

Q: Regarding naphtha, I expect this issue will be discussed this evening during the meeting of the relevant Cabinet ministers on the situation in the Middle East. On the other hand, regarding naphtha production not reaching 100% in April, you previously mentioned it was due to scheduled maintenance. Could you share your outlook on how and when production will return to the 100% level? Furthermore, once it recovers, and if specific countermeasures against bottlenecks are agreed upon at this evening's meeting, do you expect that such countermeasures will help resolve the bottlenecks to some degree?

A: As I have repeatedly stated, we have secured the amount of crude oil and petroleum products that is necessary for Japan as a whole. Regarding naphtha, through measures such as continuing domestic refining, expanding imports from outside the Middle East, and utilizing inventories of intermediate chemical products, or even importing naphtha itself, we expect to maintain a stable supply well into the next year. Regarding my remarks at the Kiire Terminal, let me explain in a little more detail. First, regarding naphtha, I want to establish a common understanding that while production volume refers to the volume yielded by refining crude oil, there is a distinct and separate concept of supply volume. Production volume refers strictly to the amount of naphtha generated by refining crude oil. On the other hand, supply volume refers to the total amount available in the domestic market. This includes not only that domestic production, but also the naphtha drawn down from existing inventories and what is imported from foreign sources. Therefore, I want us all to share the understanding that the aspect that most directly impacts people's daily lives is the supply volume, as it represents how much naphtha is actually being distributed in Japan. At the same time, production volume remains a vital concept, serving as one of the three core pillars I just mentioned, the others being stock drawdowns and imports. With this shared understanding in mind, let me explain carefully: it is true that domestic naphtha production has dropped recently, but this is strictly due to scheduled maintenance. Regarding when production is expected to return to the same level as the same month in the previous year, or to the same level as previous years, it is projected to be around July, once the peak period of scheduled maintenance concludes. Therefore, until then, it remains a fact that the production volume, which, as I mentioned earlier, constitutes a part of the total naphtha supply volume, will remain lower because scheduled maintenance will continue through around July. However, the production volume is expected to return to normal around July. In the meantime, some may worry whether a shortage of naphtha-derived petroleum products will cause disruption to people's daily lives. In response to that, I say we expect no such issues. While the production volume is currently down, the other supply-side factors I mentioned will significantly increase: we are continuing domestic refining, expanding alternative naphtha imports, drawing down inventories of intermediate chemical products like polyethylene, and increasing imports of midstream and downstream products. Because these channels other than naphtha production will expand to this substantial extent, our outlook shows that the total supply of naphtha-derived products will be maintained at average levels of previous years. This detailed explanation expands upon the brief remarks I made at the Kiire Terminal, which I wanted to clarify today at this regular press conference.

With that said, therefore, when we look at it from the perspective of the total naphtha supply, volumes will indeed be maintained at normal levels. This is precisely what I mean when I reassure you that we are on track, that supplies remain on par with average years, and that we can successfully secure our naphtha needs through the end of the year and beyond. In addition, products like thinner, which are manufactured from naphtha, have drawn many inquiries, as well as major petroleum-related products such as paints and PVC pipes. Their supply levels are being maintained at or above the previous year's levels. On the other hand, we are seeing gradual supply chain constraints. For instance, due to a lack of visibility about the future, some operators might preemptively restrict supplies, even though raw materials are arriving as scheduled this month. Another issue is the lack of timely communication between businesses. For example, materials may have already arrived, but failure to notify the buyers can trigger widespread confusion. Then, there is an anecdote I often share. A foreman back in my hometown told me, “Minister, don't worry, I just ordered ten times my usual amount of glue.” Far from reassuring me, it actually made me deeply anxious. This kind of over-ordering by some distributors and end-users is causing localized supply imbalances and bottlenecks in distribution. Therefore, we will continue to gather supply chain information through the information desks established across relevant ministries and agencies. At the same time, Regional Bureaus of Economy, Trade and Industry will collaborate with relevant organizations to provide push-type support to downstream businesses, such as builders and auto repair shops, thereby steadily correcting supply imbalances and resolving bottlenecks. This covers the whole explanation regarding my previous remarks on naphtha at the Kiire Terminal.