Japan Utilities Fuel Costs Set to Double Since Fukushima Crisis

Fuel costs at Japan’s nine power utilities may nearly double this fiscal year from two years earlier because most of the country’s nuclear reactors remain shut, a government advisory board estimated.

The nine utilities are expected to pay about 6.8 trillion yen ($85.2 billion) for fossil fuels, including liquefied natural gas and crude oil, to run thermal power plants in the year ending March 2013.

That compares with approximately 3.6 trillion yen in the year ended March 2011, the board said in a report on its website. The surge reflects the switching on of thermal plants to replace nuclear reactors shut for safety checks following the quake and tsunami in March 2011 that wrecked the Fukushima Dai- Ichi atomic plant.

Japan, which imports almost all of its crude oil and natural gas, had a trade deficit of 558.6 billion yen last month, marking the first shortfall in September since 1979. The country may have a trade deficit for the second consecutive year in the period ending March 2013 as fuel imports soar and all but two of the nation’s 50 reactors remain offline, the Institute of Energy Economics said in a July 2 report.

The nine nuclear plant operators had about 5.9 trillion yen of fuel costs in the year ended March 2012, 2.3 trillion yen more than a year earlier, the advisory board said in the report. Japan’s utilities reported combined losses of 1.6 trillion yen last fiscal year due to the jump in fuel costs.

To contact the reporter on this story: Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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