The Current State of
Japan’s LP Gas Industry
March 2017
Petroleum Distribution and Retail Division,
Natural Resources and Fuel Department,
Agency for Natural Resources and Energy,
Ministry of Economy, Trade and Industry
Current Domestic Demand and Challenges
<Current State>
• Japan’s current LPG demand is approx. 14 million tons. The demand for
residential/commercial use accounts for 44%, while industrial and chemical
feedstock around 20% each.
• Gross demand has been declining after reaching its peak of 19.70 million tons in
1996. In particular, the demand for residential/commercial use has declined.
<Challenges to be addressed>
1. Creating demand (especially for residential/commercial use)
2. Strengthening the foundation of the LPG industry
Gross demand by sector (FY2015)
Transition of gross demand by sector
20,000
Gross demand total: Approx. 14.23 million tons
18,000
City gas
(6.8%)
Power generation (1.2%)
16,000
14,000
12,000
Automobiles
(7.3%)
10,000
Residential/
commercial
(44.2%)
Chemical
feedstock
(19.0%)
8,000
6,000
4,000
Export
輸出
Power
電力用generation
Chemical
化学原料用
feedstock
Steel
(major
大口鉄鋼用
accounts)
Automobiles
自動車用
City
gas
都市ガス用
General
industrial
一般工業用
Residential/
家庭業務用
commercial
2,000
Industrial
(21.5%)
0
2
1. Creating demand (especially for residential/commercial use)
(1) Creating demand by making retail price inexpensive
①Making import price inexpensive by diversifying suppliers
(Background)
• Diversifying supplying countries is important for Japan as approx. 80% of Japan’s
LPG relies on imports.
• Since 2012, imports from the U.S. have increased. Currently, the U.S. is the top
exporter to Japan. This led to the decline in import prices.
(Measures)
Continue to support importing & primary distributing companies to diversify
supplying countries
18000
USA
その他
Others
USA
アメリカ
(1,000（千トン）
tons)
16000
East
Timor
東ティモール
マレーシア
Malaysia
14000
オーストラリア
Australia
Indonesia
インドネシア
12000
バーレン
Bahrain
Iran
イラン
Qatar
カタール
10000
8000
Kuwait
クウェート
UAE
ＵＡＥ
6000
Saudi
サウジ Arabia
4000
Middle East
2000
0
’88
63 ’89
2 ’91
3 ’92
4 ’93
5 ’94
6 ’95
7 ’96
8 ’97
9 ’98
10 ’99
11 ’00
12 ’01
13 ’02
14 ’03
15 ’04
16 ’05
17 ’06
18 ’07
19 ’08
20 ’09
21 ’10
22 ’11
23 ’12
24 ’13
25 ’14
26 ’15
27
元 ’90
(Source) Japan LP Gas Association
3
1. Creating demand (especially for residential/commercial use)
(1) Creating demand by making retail price inexpensive
②Promoting transparency of pricing by approx. 20,000 retailers
(Background)
• The retail price remains inflexible while the import price declined.
• Disclosure of price information to general consumers is limited, hindering
competition among business operators.
• From April this year on, both electricity and city gas will be deregulated; thus,
competition among energies will be intensified.
(Measures)
By issuing ministerial ordinances and guidelines, ensure that sellers disclose gas
rates
Figure 1:【表１】ＬＰガスのＦＯＢ（サウジＣＰ・米国価格）・ＣＩＦ価格の推移
Transition of LPG’s FOB (Saudi CP and US prices) and CIF prices
2000
1800
1600
【表２】LPガスの輸入・卸・小売価格（全国平均）の推移
Figure 2: Transition
of LPG’s import, wholesale and retail prices
140
FOB
CP)
price
(USD/ton)
Ｆ ＯＢ ((Saudi
サ ウジＣ Ｐ)
価 格(
ドル ／
トン)
Ｆ ＯＢ ((US
米国積
出 ) 価price
格 ( ドル(USD/ton)
／トン)
FOB
FAS)
Ｃ ＩＦ 価格(
ン )yen/ton)
CIF
price千円／ト
(1,000
JPY 46,403
120
9000
8000
JPY 8,039
(August 2014)
7000
JPY 7,548
(December 2016)
100
1400
6000
1200
80
5000
1000
60
800
600
Retail price
USD 380
40
4000
Wholesale price
70%
JPY 3,519
(February 2014)
JPY 2,228
(December 2016)
3000
2000
400
17%
20
200
0
1000
USD 353
’14 3 5 7 9 1127.1
9 1120.1
’08 3 5 7 9 1121.1
’10 3 5 7 9 1123.1
’13 3 5 7 9 1126.1
’15 3 5 7 9 1128.1
’16 3 5 7 9 11
’11 3 5 7 9 11 1 3 5 7 9 1125.1
’09 3 5 7 9 1122.1
0
0
12%
Import price
’07
19.2 6 10 ’08
20.2 6 10 ’09
21.2 6 10 ’10
22.2 6
JPY 2,130
10 ’11
23.2 6 10 24.2
6 10 25.225.6 10 ’14
26.2 6 10 JPY
27.2 923
6 10 2
(February 2014)
*CIF:
Trade statistics (each country’s import price/each country’s import volume)
※CIF：貿易統計（各国輸入価格÷各国輸入量）
6 10
(December 2016)
*Import
price: CIF price (1,000 yen/ton) equivalent to 10 m3
※輸入価格：CIF価格（千円/トン）を１０m3換算したもの
4
1. Creating demand (especially for residential/commercial use)
(1) Creating demand by making retail price inexpensive
③Considering reducing the obligated amount of private-sector
stockpiling to enhance price-bargaining power
<Current State>
• Japan has national stockpiling and private-sector stockpiling to ensure a stable supply.
National stockpiles (five bases in Japan) are being increased aiming at 1.5 million tons (to be
achieved in FY2017). For private-sector stockpiling, import operators are obligated to stockpile
50 times the daily import amount since 1981.
• Meanwhile, Japan’s stockpiling system also affects trade negotiations with supplying countries.
<Measures>
Start considering easing the obligation of private-sector stockpiling, taking into account the
progress of supplier diversification and retail price disclosure
Japan’s national LPG reserve bases and LPG reserve amounts
•Nanao (Ishikawa Prefecture)
•Capacity: 250,000 tons
•Reserve system: Aboveground
low-temperature tank system
•Kurashiki (Okayama Prefecture)
•Capacity: 400,000 tons
•Reserve system: Underground
water-sealed rock cavern system
120
National
stockpiling (days)
国家備蓄（日数）
民間備蓄（日数） stockpiling (days)
Private-sector
100
80
6
11
60
•Fukushima (Nagasaki Prefecture)
•Capacity: 200,000 tons
•Reserve system: Aboveground
low-temperature tank system
19
19
22
22
20
20
56
58
27
31
62
62
41
47
65
60
40
67
59
60
63
57
60
20
•Namikata (Ehime Prefecture)
•Capacity: 450,000 tons
•Reserve system: Underground
water-sealed rock cavern system
•Kamisu (Ibaraki Prefecture)
•Capacity: 200,000 tons
•Reserve system: Aboveground
low-temperature tank system
0
FY2005
H17FY
FY2006
H18FY FY2007
H19FY
FY2008
H20FY FY2009
H21FY
FY2010
H22FY
FY2011
H23FY
FY2012
H24FY FY2013
H25FY FY2014
H26FY
FY2015
H27FY
FY2016
H28FY
(December)
(12月)
5
1. Creating demand (especially for residential/commercial use)
(2) Creating other demands
①Promoting the widespread use of FRP cylinders
Acquire new demands from electricity-only households
(Promote the proliferation of indoor FRP cylinders that can be used for gas fan heaters)
(Source) Japan L.P. Gas Sales Association
②Maintaining the demand for LPG vehicles
The number of LPG vehicles decreased by 40,000 during the last five years, falling to approx.
210,000 at present. Start considering measures to increase comparative advantages for using
it as automotive fuel (e.g., butane gas mixture needs to be reexamined as its price is soaring).
(unit: vehicle)
350,000
Transition of the number of registered LPG vehicles in
Japan (last 10 years)
300,000
250,000
LPG vehicles
LPG自動車
200,000
Taxis among
うちタクシー
LPG vehicles
150,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (FY)
(unit: vehicles)
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
295,124
293,959
291,529
287,480
277,437
257,250
247,830
239,647
231,846
223,918
215,970
Decreased by approx. 40,000
during the last five years
6
2. Strengthening the foundation of the LPG industry
(1) Enhancing the central control system
(Background)
It is necessary to reduce the costs for managing the stand-alone & distributed energy
system.
(Measures)
Support the central control system that introduces the IT system to centrally control the
meter reading and/or the shutdown of the supply at the time of disasters such as
earthquakes
General consumers
and others
Central monitoring center
Safety agency
(emergency contact)
①Information sent from microcomputer meters/
contact from general consumers and others
(telephone line/wireless)
* Monitors the gas safety of the houses of
general consumers and others 24/7
②Contact and confirm the situation, and/or
remotely shut down the supply
Microcomputer meter
Transmission
device
LPG cylinders
③Call for service
after remote shutdown
Safety agency
(emergency response)
④Dispatch (Emergency response)
• By using IoT, the system connects the general
consumers’ houses to the central monitoring center and
monitors the safety status of the houses 24/7. In
case of emergency, it immediately shuts down the
supply remotely.
7
2. Strengthening the foundation of the LPG industry
(2) International business development in LPG-related industries
(Background)
• To meet the world’s strictest safety standards, Japan’s LPG industry has developed
various safety devices and accumulated safety-related know-how.
<Vietnam> A Japanese seller partnered with a Vietnamese seller and became the No.
2 seller in Vietnam, as the Japanese safety standards were seen as the
selling point.
<Bangladesh> A Japanese meter manufacturer received the order for 60,000 prepaid
residential gas meters.
(Measures)
Conduct market research in Vietnam and Myanmar. By establishing the forums for
dialogues at the private sector and the government levels, support the broader LPG use in
the Southeast Asian countries where the increase in demand is expected.
Transition of the
number of accidents
Number of accidents
Number of injuries
1979
Accidents 793
Injuries 825
Fatalities 63
Number of fatalities
2015
Accidents 172
Injuries
60
Fatalities
2
Number
of
accidents
1997
Accidents 68
Injuries 64
Fatalities 6
’67 ’68 ’69 ’70’71’72 ’73’74 ’75 ’76 ’77’78’79 ’80 ’81’82 ’83 ’84 ’85’86 ’87’88 ’89 ’90’91’92 ’93 ’94 ’95’96 ’97’98 ’99 ’00 ’01’02 ’03’04’05 ’06’07 ’08’09’10’11 ’12’13 ’14’15
Year
8