Japan is readying a $10-billion financial support package for Southeast Asian economies to help them procure crude oil amid the supply shock from the Middle East, Japanese news outlet NHK reports.
Japan’s Prime Minister Sanae Takaichi is set to unveil the package on Wednesday at an online summit meeting of the Asia Zero Emission Community plus, or AZEC plus. This framework includes Japan and most of the ASEAN member states of the Southeast Asia alliance.
The $10-billion package will be disbursed through the government-affiliated Japan Bank for International Cooperation and other financial institutions, according to NHK.
Southeast Asia is the region most hit by the collapse of crude supply from the Middle East since the Iran war began, with countries grappling with fuel shortages and spiking fuel prices.
The Philippines, for example, in March declared a national energy emergency, the first country in the world to do so, after gasoline and diesel prices doubled since the war began. The Philippines depends on imports from the Middle East for 98% of its oil needs.
Vietnam, for its part, temporarily removed the value-added tax on gasoline, diesel, and jet fuel until April 15, while local airlines slashed routes as of April 1 amid a major aviation fuel crunch.
Countries have also resorted to four-day work weeks, closing universities, and encouraging work from home to save fuel.
Japan, for its part, has already tapped its oil reserves, twice, since the war began.
Japan, which depends on Middle Eastern oil supply for about 95% of its oil supply, began releasing oil stocks from national reserves at the end of March, as part of the IEA-coordinated record-high release of 400 million barrels of oil and fuel. Japan is releasing a total of 80 million barrels of oil stocks, including 54 million barrels of crude and 26 million barrels of oil products as part of the IEA’s 400-million-barrel release.
Last week, Japan announced it would release another 20 days of worth of oil from reserves beginning next month, but all these are intended for the domestic market.
By Tsvetana Paraskova for Oilprice.com
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