business

2 of Japan's biggest oil refiners to merge as industry faces downturn

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© 2015 AFP

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"Newco", eh? How much thought went into that?

4 ( +4 / -0 )

Oil dropping all the time means the pump price should be a lot cheaper-gas companies are still gouging their customers. Had they been fairer in the past, then more Japanese would be into cars-serves them right!

-2 ( +1 / -3 )

Had they been fairer in the past, then more Japanese would be into cars-serves them right! actually it was the markets that dictated the price of oil, but that also has a lot to do with the biggest price fixers of all OPEC, if they had kept production high during the boom years then maybe the price of oil wouldnt have skyrocketed, making many people buy fuel efficient vehicles and even manufacturers like Tesla to appear and new electric, hydrogen fuel cell car to become available. But I do agree that OPEC has shot themselves in the foot, people are now looking for cheaper alternatives to oil, with shale gas and natural gas production exploding in the last 10yrs OPEC are now desperately trying to keep oil low (loss making) to kill off this new competition.. But im pleased that they are being squeezed and that gas production from non OPEC countries will be here to stay for a long time yet.

1 ( +2 / -1 )

They are managing decline folks, foreign interest in the oil biz have all pretty much left Japan or a planning too

0 ( +0 / -0 )

It is all pretty simple. Most people are quick to point at the lower price of crude and accuse the refiners of gouging and lying about it. Then others assume that lower gasoline prices should be forthcoming, so again the refiners are gouging everyone and lying about it. Lazy journalists will just fan those flames.

Let's look instead at what the company leaders are saying and assume for a moment that it just might be true. You know, Japanese demand for oil has been about flat since the 1970s. If you can keep your refining capacity high and apply new technologies, you can keep refining oil more and more cheaply. You can keep making money. But if demand is dropping because people are driving hybrid cars and smaller more efficient cars, and if diesel and heating oil consumption are falling too, and if carbon taxes keep pushing consumers away from fossil fuels, then how are you going to keep making money?

Consolidation. It makes sense. And it is a consequence of Japan's carbon tax environmental policies. It is working, and this is what happens. By the way, refiners in OTHER countries are making profits these days because of lower oil prices. Japan gets kicked in the stomach for its environmental policies, but its carbon taxes are stronger than its refining companies, which can't be said for the US, for instance.

Watch what is happening at the pumps. What I see is that gas stations are trying desperately to raise prices. They can't do it. Prices have been falling for over a year now, and they are about cut to the bone now. SO much of the remaining price is taxes and transport now that I don't think gas stations are making much of a profit at all. They are going to start closing up, eventually to be replaced by electric chargers or hydrogen stations, probably.

0 ( +0 / -0 )

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