Japan’s Fuel Costs May Rise to 7.5 Trillion Yen, Meti Estimates

The combined fuel costs for Japan’s nine regional power companies will almost double to 7.5 trillion yen ($77 billion) this fiscal year from three years earlier, the Ministry of Trade, Economy, and Industry predicted.

Tokyo Electric Power Co. and eight other power companies will have to pay 3.6 trillion yen more in combined fuel costs this fiscal year than in fiscal 2010 to make up for lost nuclear power output, the ministry known as Meti estimated in a report today. The forecast assumes Japan won’t restart any of its nuclear reactors by the end of March 2014, it said.

Kansai Electric Power Co.’s Ohi No. 3 and No. 4 reactors were shut for planned safety checks in September, leaving the country with no nuclear power output for the first time since July 2012. An increase in fossil-fuel imports would force Japan to have a third consecutive annual trade deficit in the year ending in March, the government-affiliated Institute of Energy Economics, Japan, said in an August report.

The power companies boosted the use of liquefied natural gas and oil as their reactors were shut one by one after the March 2011 Fukushima disaster, which shattered Japan’s confidence in the safety of nuclear energy. LNG costs in fiscal 2013 will rise by 1.7 trillion yen from three years earlier, while utilities will have to pay 2.1 trillion yen more in costs to purchase crude and fuel oil, Meti said in the report.

Coal costs will rise 100 billion yen, while fuel expenses related to nuclear-power generation will fall 300 billion yen.

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