The government will raise the country's petroleum stockpile to 345.95 million barrels from 314.5 million barrels for the first hike in 14 years, government officials said Saturday.
The Ministry of International Trade and Industry's Natural Resources and Energy Agency will seek funds for the increase in its fiscal 2001 budget request, the officials said.
The agency intends to raise the petroleum stockpile for the public and private sectors to the level held by major members of the International Energy Agency, the officials said.
The agency took into account the sharp rise in crude oil prices this year due to the tight supply-demand balance, as well as the invalidation at the end of February of oil drilling rights in Saudi Arabia held by Arabian Oil Co., the officials said.
They said that storage of the 31.45 million barrel increase, equivalent to about 8.5 days of oil consumption in Japan, will be entrusted to the private sector.
As the stockpile hike is projected to cost the government around 60 billion yen at current prices, the government plans to take several years to buy the extra oil beginning from fiscal 2001, which starts April 1.
The Japanese government started to stockpile oil in fiscal 1978 after the oil shock of the early 1970s, where Middle East conflicts resulted in steep rises in crude oil prices.
The government decided in fiscal 1987 to raise the stockpile to 314.5 million barrels. It achieved that goal in February 1998.
However, the level is lower than the average for nine major IEA members, including the United States and Germany.