Japan’s commercial LPG demand faces up to restrictions

Japan's LPG demand is expected to fall with the government's state of emergency to curb its Covid-19 outbreak and the slowdown in the country's economic activity.

The state of emergency declaration allows authorities in Tokyo and six other prefectures to require commercial consumers of LPG, such as restaurants and hotels, to halt operations. It imposes tougher restriction on residents' movements, largely confining them to their homes from 8 April until 6 May.

Government-affiliated think-tank the Institute of Energy Economics Japan (IEEJ) previously forecast operations at restaurants and hotels to fall by 80pc and by 50pc respectively, if a lockdown was imposed on Japan's main cities.

But household consumption could rise with the increasing number of people staying at home.Use of LPG for cooking could increase by 10pc in case of a lockdown, according to the IEEJ forecast.

LPG supplies face minimal disruptions with essential infrastructure and businesses such as refiners allowed to continue operating. The Japan LP gas association (JPLGA) also expects the government to allow gas suppliers to maintain operations. LPG suppliers have already taken precautionary measures against possible operational disruptions amid the coronavirus outbreak.

The household and commercial sectors account for most of Japan's LPG consumption. They consumed 7.4mn t or 51.5pc of the total 14.3mn t consumption during 2019, according to JPLGA data.

By Nanami Oki

source: Argus Media