Japan's Crude Imports Rise on Demand From Utilities

By [bn:PRSN=1] Shigeru Sato [] and [bn:PRSN=1] Yuji Okada []

Aug. 21 (Bloomberg) -- Japan's crude oil imports increased in July as regional power utilities burned more fossil fuels to make up for reduced nuclear generation in the world's third- largest energy-consuming nation.

Japan purchased 20.3 million kiloliters, or about 4.12 million barrels a day, of oil last month, up 2.8 percent from a year earlier, according to a finance ministry report released in Tokyo today. The oil import bill rose 69 percent to 1.79 trillion yen ($16.3 billion) as crude oil prices remained above $110 a barrel.

The indefinite closure of Tokyo Electric Power Co.'s Kashiwazaki-Kariwa nuclear plant, which was shut after an earthquake on July 16, 2007, prompted the utility to switch to oil and gas-fired generation.

Japan's fuel oil use at thermal power plants increased by 7.6 percent in June from a year earlier, in contrast to the decline in consumption of other refined products such as gasoline.

Liquefied natural gas imports rose 7.6 percent last month to 6.06 million metric tons, according to the trade report. Coal imports gained 5.4 percent to 17.5 million tons.

Benchmark crude oil prices in New York climbed 67 percent in the past 12 months, sending local retail gasoline, kerosene and gasoil prices to record levels. Oil traded at $115.87 a barrel in after-hours trading at 9:03 a.m. Tokyo time.

To contact the reporters on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net; Yuji Okada in Tokyo at yokada6@bloomberg.net.