Economy & Tech
EDITORIAL | Stable Aviation Fuel Supply is Key to Sustaining New Economy
The government is projecting that 60 million tourists will come to Japan in 2030. Meanwhile, aviation fuel shortage prevents airlines from adding flights.
This situation could frustrate the government's plans to make Japan a true powerhouse among travel destinations. With inbound passenger numbers recovering from the COVID-19 decline, thanks to the weak yen, a shortage of aviation fuel has developed at airports nationwide. As a result, a growing number of foreign airlines are holding off on increasing flight frequency and adding new routes.
The Ministry of Economy, Trade and Industry and the Ministry of Land, Infrastructure, Transport and Tourism have established a special public-private team for this problem. It includes representatives from fuel refiners and airlines, who have been mulling countermeasures since June. Hopefully, they will soon adopt effective remedies.
Behind the Problem
In recent decades, oil refiners have been scrapping or consolidating refineries in response to declining demand for petroleum products. At present, refineries have some leeway with their utilization rates. However, it will be difficult for them to sharply increase the production of aviation fuel alone.
A special characteristic of the petroleum products produced through the refinement of crude oil is that multiple products, including gasoline and kerosene, are produced in certain proportions. Consequently, boosting utilization rates to produce more aviation fuel would also result in the production of petroleum products for which there is no demand.
The consolidation of the oil refineries has also had a major impact on the distance aviation fuel must be transported to reach airports. Other difficulties have also hindered the distribution of aviation fuel. For example, there have been problems securing transport ships. Furthermore, there has been a shortage of tanker truck drivers due to restrictions on overtime work. Those rules took effect in April. Finally, there is also a shortage of workers to carry out fueling activities at the airports.
Available Countermeasures
Importation of aviation fuel would be one effective countermeasure. ENEOS Corporation, Japan's largest oil company, is considering importing from South Korea and China to meet demand. Some observers have also pointed out that repurposing chemical tankers could provide an effective means for transporting aviation fuel. Normally, those tankers carry chemical products.
Nonetheless, if we want to improve transport efficiency, we most likely will need to also add more storage tanks at the airports themselves and build larger ships. But such measures would require new investment. We should, therefore, consider national and local government subsidies.
Shortages of aviation fuel are appearing nationwide. Reportedly, currently at Narita International Airport, the fuel situation is such that six overseas airlines are unable to increase the number of flights as they wish. They had hoped for a total of 57 per week. Also, airlines cannot launch services on new routes during their preferred time frames. The fact that airports in Hokkaido and Hiroshima have likewise not been able to increase the number of flights they handle is another effect of the fuel shortage.
Impact on Other Industries
The government is projecting that 60 million tourists will come to Japan in 2030. That is a target that is roughly double the number that arrived in 2019. In local areas, there are high hopes that inbound demand will catalyze economic revitalization.
A shortage of aviation fuel must not stand as an obstacle to the fulfillment of these hopes. Therefore, now is the time for the public and private sectors to come up with viable solutions to the problem.
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(Read the editorial in Japanese.)
Author: Editorial Board, The Sankei Shimbun
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