Gasoline demand in Japan has been declining for past two years due to increasing fuel prices but export of refined products is increasing and touched record high in 2007.

The demand for gasoline in Japan declined for the second consecutive year in 2007, which enabled refiners to export refined products, and consequently, the export touched a record high, as per the news published by Bloomberg.com.

There was decline of 1.7% to nearly 60 Million Kiloliters in sale of gasoline last year. The export of refined products increased by 27% and reached to 28 Million Kiloliters and crossed the previous record of 22.3 Million Kiloliters set in 1975. Among all the refined products, diesel export jumped 92% and reached 7.96 Million Kiloliters last year and alone contributed 27% to the total gains from export of all refined products.

This fall in the consumption of gasoline is due to rising prices of gasoline which pressurized the consumers, manufactures, and office building owners to look for methods of energy saving. Spiraling crude oil prices have surged cost of running electricity generators, cars, and boilers etc.

Also, Japan is a Kyoto Protocol signatory, which bound it to curtail the emission of greenhouse gases. And government’s commitment to reduce the emission of greenhouse gases is declining the gasoline consumption in the country.

Slump in the demand for gasoline in the domestic market has encouraged refined product exporters to enhance their export to other destinations. Even many exporters in Japan have started investing in plant upgradation and shipping terminals to make use of the rising demand of petroleum products in the US, China, India and other Asian countries. Consequently, Japan export of refined products touched a record high in 2007 since 1957 when it began exporting.

According to a Research Analyst at RNCOS , “The import of crude oil has declined in Japan because of lesser demand in the domestic market. Despite that, it is still the third largest consumer of oil in the world after the US and China. However, the global demand for oil is very strong which has increased the export but decline in the domestic market is a cause of worry for the country because domestic demand plays the most important role in boosting the economy. To cope up with this problem, the government should take some steps, like giving subsidies to refiners.”