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Japan's fuel imports contribute to record trade deficit

  |   Jan. 27, 2014 at 2:34 PM
TOKYO, Jan. 27 (UPI) -- Soaring fuel imports in the aftermath of Japan's 2011 Fukushima nuclear disaster, amid a weaker yen, have contributed to the country's record annual trade deficit, a government official said.

Japan Monday reported a trade deficit of $112.07 billion in 2013, up 65.3 percent from the previous year.

"Energy imports have been rising significantly since the nuclear accident," causing per capita costs of around $293 in Japan, Kyodo News quoted Yoshihide Suga, chief Cabinet secretary as telling reporters. "It is important for us to ease such a burden as much as possible."

All 50 of Japan's working reactors currently remain offline, pending safety checks.

Japan relies on imports for more than 90 percent of its energy needs. Imports of liquefied natural gas to Japan last year rose 17.5 percent and imports of crude oil rose 16.3 percent.

With those import costs expected to grow, amid a weak yen and a prolonged nuclear shutdown of the country's reactors, Japan's trade deficit is "likely to continue for an extended period," Kyodo quoted Koya Miyamae, senior economist of SMBC Nikko Securities Inc., as saying.

Because of Japan's reduced nuclear generation, in 2012 Japan spent $289 billion on net imports of fossil fuels, more than any other country in the world, even surpassing China and the United States, says the Institute for Energy Economics, a think tank partly funded by the Japanese government.

Japanese utilities have raised rates by an average 10 percent since the Fukushima disaster to cover the cost of additional oil and gas, and are warning of future increases if reactors remain offline, the Financial Times reported.

Suga, the government's top spokesman, said the government would make efforts to reduce energy costs, such as promoting the use of renewable energy and increasing imports of cheaper shale gas. He did not indicate when the government would make a decision about nuclear power plant restarts.

Japanese Prime Minister Shinzo Abe wants to reactivate the reactors once they are deemed as complying with new safety standards introduced after the Fukushima disaster.

Japan could reduce its burden of importing fuel at high prices if a phase-in of nuclear power were to be implemented, Kazuyoshi Nakata, an economist at Mitsubishi UFJ Research & Consulting Co., was cited as saying by Xinhua news agency.

"Fuel import volumes will decrease if nuclear power plants are restarted, but not immediately as it depends on the pace and timing of restarts," Nakata said.

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