The Economy, Trade and Industry Ministry was poised to submit a bill Tuesday that would tighten regulations on domestic oil refiners and sellers to ensure they meet stockpiling requirements.
At present, the government is obliged to stockpile oil equivalent to 83 days of consumption, and the private sector is required to keep a 70-day supply. But a number of private companies have not been fulfilling their quota.
The bill stipulates that offenders face a prison term of up to one year in addition to a 3 million yen fine. Current law calls for the fine only.
The bill, to be submitted after Cabinet approval, also seeks to revise two other oil-related laws in a package of measures designed to secure stable oil supplies.
Separately, the government in its fiscal 2001 budget is seeking to set aside funds to increase the country's petroleum stockpile for the first time in 14 years, to 345.95 million barrels from the present allocation of 314.5 million barrels.
In addition, the bill would allow Japan National Oil Corp., a state-owned concern that supports private oil-exploration, to help those wanting to purchase already-operating oil fields.
The bill also seeks to scrap a 39-year-old law governing the oil-refining industry that sets licensing requirements for firms that want to enter the business and establishes supply-demand controls and price limits.
The official said the repeal would mark the last in a series of efforts the ministry has made during the past 14 years to liberalize Japan's oil industry.
The government will leave peacetime refining operations completely to market mechanisms and limit state intervention to deal only with emergencies, the official said.