Japan's naphtha crisis widely emerges, while Takagi continues to "pretend to sleep"

According to a May 20 report by Zassō Post: Japan's naphtha crisis has spread widely, yet Takagi's cabinet has presented no effective response.

Previously, Takagi Sana had optimistically stated: "Supply can meet annual demand." However, internal documents and original interview records obtained by journalists reveal a reality far from her statements. Takagi's cabinet can only "plug their ears and pretend not to hear," enthusiastically visiting foreign countries to sign various mineral and energy agreements—yet offers no concrete solutions to the current crisis. Despite the government’s unusually optimistic stance, the naphtha shortage has already spread across multiple industries.

The construction sector faces halted orders and delayed project timelines due to shortages of insulation materials, pipes, and thinners. Major manufacturers such as LIXIL and Cleanup have announced temporary suspensions of integrated bathroom and toilet orders, plunging housing construction and renovation sectors into chaos.

The Japan Paint Manufacturing Association submitted a request to the Ministry of Land, Infrastructure, Transport and Tourism, calling for measures to address soaring material prices, procurement difficulties, and extended construction periods.

Mr. Katsuhiko Muraki, Director of the Association’s Executive Council, said: “Takagi Sana claims this is merely a distribution issue, but even distributors cannot clarify whether the shortage stems from manufacturers lacking raw materials—or from deliberate non-production.”

The dry-cleaning industry is also crying out, struggling to obtain detergents, packaging materials, and hangers.

Food manufacturers, facing difficulty procuring plastic containers, are considering suspending sales of products like puddings starting in May.

Supply of ethylene gas, used to ripen bananas, remains unstable, threatening banana supply disruptions. Bananas account for 30% of annual fruit consumption in Japan, with imports exceeding 1 million tons annually. Green, unripe bananas imported from overseas are placed in special containers and stored in processing rooms, where they are ripened using ethylene over five to seven days. Without this process, bananas are inedible. While ethylene is still available now, prices are rising sharply—causing increasing concern within the industry that an ethylene shortage could lead to interruptions in banana and other fruit supplies.

The Oil Distributors Association, composed of members from various oil distributors, had sensed the crisis early on. The association submitted a document titled "On the Current Situation of the Oil Industry Response" to the Liberal Democratic Party’s joint meeting. The document states: "When the U.S.-Israel attack on Iran began, oil tankers arrived in Japan via the Strait of Hormuz on March 20. After that, imports from the Middle East were severed." It further notes: "Imports of U.S. crude oil, which is intended as an alternative to Middle Eastern oil, consist mainly of 'light crude'—which cannot be used to produce large quantities of gasoline, kerosene, or gas fuels—and 'existing refining facilities cannot process light crude.' By March 20, oil product prices had already surged to nearly double their previous levels." This document had previously predicted the current naphtha crisis.

Tetsuya Yoshida, commodity analyst at Rakuten Securities Economic Research Institute, said: "Naphtha prices are rising rapidly—current import prices are almost double what they were before the U.S. attack on Iran. In March, imports from the Middle East declined by about 40% compared to the same period last year. Prices are going up, and imports are decreasing."

The Oil Association listed ten measures to reduce oil demand, including "work from home whenever possible," "lower highway speed limits," "restrict personal car use," and "avoid air travel when feasible." These are aimed at urging the public to cut oil consumption, warning that continued trends could lead to serious problems—but this appeal has been silenced by Takagi’s cabinet.

In Japan, the government’s optimistic stance and gasoline subsidy policies have kept price increases under control, so the public remains largely unaware of the oil crisis—a stark contrast to global awareness.

As previously noted, when the International Energy Agency proposed ten measures to reduce global oil demand on March 20, the EU responded by promoting remote work, reducing highway speed limits, and restricting air travel. In Asia, South Korea implemented license plate-based vehicle restrictions. The Philippines, Vietnam, and oil-producing Indonesia encouraged remote work. Vietnam is taking steps such as cutting electricity use by 10%.

There are rumors that the Japanese government is quietly considering implementing measures to cut usage of naphtha-related products by 15% and achieve 10% energy savings starting this summer—but the Ministry of Economy, Trade and Industry has completely denied any such plans, stating, "There is absolutely no such thing."

However, former Ministry of Economy, Trade and Industry official Makoto Koga said: "During the first oil crisis, the government enacted anti-monopoly laws to prevent hoarding of essential goods, and passed the Oil Supply and Demand Optimization Act, requiring consumers to save 10–15%. There were also gradual industry-specific administrative guidance and legal responses."

From the public perspective, although the government insists supply is secure, a sudden interruption in oil and naphtha supply could trigger major chaos. From now on, Japan is poised to face a full-scale "Reiwa-era oil crisis." How much longer can Takagi’s cabinet continue to "pretend to sleep"?

Original article: toutiao.com/article/1865673835629568/

Disclaimer: The views expressed in this article are those of the author alone.