Japan cabinet backs plan to help oil importers pay for higher transport costs

Japan cabinet backs plan to help oil importers pay for higher transport costs TOKYO, Oct 13 : Japan's cabinet approved three bills on Tuesday to strengthen energy supply security, including measures to offset higher costs of importing crude oil through routes that bypass the Strait of Hormuz, Industry Minister Ryosei Akazawa said. The government plans to submit the bills to parliament during the current extraordinary Diet session. • "Through these three bills, we aim to improve supply security by diversifying sources of crude oil and other fossil fuels and reducing related risks," Akazawa told a press conference. • The bills include measures to diversify crude oil and other fuel procurement, provide transport insurance support and amend the law governing the Japan Organization for Metals and Energy Security (JOGMEC) • The procurement diversification bill would create a grant programme to compensate importers for higher transportation costs when sourcing crude oil and fuels via alternative routes that avoid certain chokepoints such as the Strait of Hormuz • The scheme would be fully funded by contributions from a broad range of importers, including oil refiners, traders and petrochemical manufacturers • The insurance bill would allow the government to cover part of insurance payouts for oil tankers and other vessels carrying petroleum products and liquefied natural gas if foreign reinsurers are unable to provide coverage due to heightened geopolitical tensions, an industry ministry official said • The JOGMEC amendments would allow the state-backed agency to invest in infrastructure needed to secure alternative supply routes, including pipelines • Japan sourced 94 per cent of its crude oil imports from the Middle East in 2025, with 93 per cent of those shipments passing through the Strait of Hormuz • In August, Japan unveiled a comprehensive plan to strengthen the energy supply resilience, with specific measures, including legislative steps, expected to be finalised by year-end • Crude oil procurement for October is expected to reach about 100 per cent of the average monthly supply in 2025, securing the necessary volumes of crude oil and petroleum products, Akazawa said