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Japanese refiners urge early orders from airlines amid jet fuel shortage

Shortage due to supply chain bottlenecks hindering the expansion of international flight capacity

The head of the Japanese petroleum industry called on Thursday for international airlines to provide flight schedules and jet fuel demand forecasts a year in advance as a solution to a jet fuel shortage at Japanese airports.

The jet fuel shortage in Japan in recent months, caused by supply chain bottlenecks, is affecting commercial flights, hindering the expansion of international flight capacity and new routes amid a boom in tourism.

"The fact that supply is partly not keeping up with spot demand is the starting point of the current problem," Shunichi Kito, the president of the Petroleum Association of Japan (PAJ), told a news conference.

He said domestic airlines did not face refuelling issues because they provide demand outlooks in advance through contracts.

"It's extremely important to receive supply requests for overseas flights ahead of time to understand demand and make preparations," Kito said, adding that refiners would hope to get an advance notice of about one year, as practiced by domestic carriers.

To meet rising demand, Japanese refiners plan to increase jet fuel production and imports.

"If we need to import, South Korea would be the most realistic option," said Kito, who is also the president of Japan's second-biggest oil refiner Idemitsu Kosan. Singapore and China are other candidates and some talks over imports have already started, he said.

Kito said while there is no overall shortage of jet fuel, supply chain bottlenecks - a lack of domestic vessels, lorries and refuelling staff - are preventing fuel from reaching destinations.

"We'll respond in cooperation with all the parties involved," he said.

The government is investigating the situation at each airport and refiners are on track to secure fuel as a short-term measure, Kito said, adding medium- and long-term measures will be considered based on future fuel demand forecasts.

At Narita International Airport, Japan's main international airport, the fuel crunch affected the operations of 57 flights by six airlines by the end of June, a spokesperson said, without providing details.

The operator of Narita Airport has asked traders to procure jet fuel directly from overseas refineries by international shipping vessels for the first time, he said, rather than stopping off at Japanese refineries en route.

Tourism to Japan bounced back after visa-free travel resumed in late 2022 following strict COVID-19 border controls, with the yen's slide to a 38-year low increasing the country's appeal to overseas visitors.