OREANDA-NEWS. Idemitsu Kosan Co.,Ltd. announces that it has decided that total crude oil refining at its four refineries scheduled for the Japanese market from January through March 2014 will be 7.5 million kl, 99% of its production in the same period of the previous year. We estimate total crude oil refining for the Japanese market from October through December 2013 to be exactly at the level we stated in the previous announcement, though we started reducing production of gasoline in December.

Despite the fundamental shift toward recovery in the Japanese economy, domestic demand for fuel products is expected to decline compared with a year earlier for various reasons, including the diffusion of energy-saving vehicles.

The crude oil refining for the Japanese market from January through March has been set to meet domestic demand. Idemitsu will strive to ensure stable supplies of crude oil by taking flexible measures, including procurement in Japan and importation of products, in the event of any major changes in domestic demand.

Demand for gasoline is declining for several reasons, including the diffusion of energy-saving vehicles. In addition, as the market price of gasoline is going generally in parallel with that of crude oil, Idemitsu has started reducing production of gasoline, and instead procures more in Japan with the view to reducing supply costs of the product.

In December, the Chiba and Aichi Refineries started reducing production of gasoline by a combined total of 40,000 kl per month (through adjustment of operation of catalytic reforming unit and alkylation unit).

The shortage resulting from the reduced production has already been offset by a procurement of 35,000 kl of gasoline in Japan. We will decide whether to procure more while continuously monitoring demand.

Production of kerosene, a product whose peak-demand season is coming, has, or will have, no impact from the current production reduction of gasoline. Idemitsu has already completed a procurement of more than 100,000 kl of kerosene in Japan, and we will continue working to ensure a completely stable supply.