By Risa Maeda
TOKYO, March 14 (Reuters) - Japan said on Monday it will allow oil companies to release 8.9 million barrels of crude oil from mandatory stockpiles to relieve pressure on supplies disrupted by Friday’s earthquake and tsunami.
The move was only the second release of reserves since a 70-days inventory cover system was introduced in 1993.
Japan’s energy sector is struggling to meet demand after the earthquake crippled several nuclear power plants and cut power to almost 2 million people in the north, prompting Trade Minister Banri Kaieda to relax the mandatory time limit.
“We require the private sector to hold 70 days as oil reserves, but we’ll make the period shorter by three days to 67 days. That means we’re releasing 1.26 million kiloliters,” he said in televised comments on Monday.
Kaieda did not say how long the oil reserve requirement would be lowered for.
The last time Japan lowered its oil reserve requirement was in the aftermath of Hurricane Katrina in 2005, when it left a lower reserve requirement in place for about four months.
The world’s third largest oil consumer had national reserves of 113 days of oil demand under the government’s storage and 85 days held by the private sector at the end of December.
Damage from the earthquake included a fire at Cosmo Oil’s 220,000 barrel per day Chiba refinery and 145,000 bpd at JX Nippon Oil & Energy’s plant in the Sendai region.
Japan has shut down a total of 774,000 bpd of refining capacity since the earthquake, Eurasia Group said.
Writing by Tom Miles