TOKYO — Idemitsu Kosan, Japan’s second-largest oil wholesaler, has decided to shut down its refinery in Yamaguchi Prefecture by the end of March 2024, as the rise of more fuel efficient vehicles cuts demand for gasoline, Nikkei has learned.
The Yamaguchi refinery accounts for 13% of Idemitsu’s total refining capacity. An announcement of the planned closure has been set for the afternoon of June 14. The company has concluded that gasoline demand will continue to decline as EVs become more popular.
Idemitsu controls the Yamaguchi refinery through Seibu Oil, an affiliate in which it owns a 38% stake alongside a variety of local companies. Idemitsu will buy out the stakes of those companies, which include UBE (formerly Ube Industries) and Chugoku Electric Power Co., before shutting down the refinery operations.
The refinery’s approximately 400 employees will be kept on and offered reassignment to other refineries in the group.
Idemitsu will consider converting the plant into a base for next-generation energy sources such as hydrogen and ammonia, which do not emit carbon dioxide when burned, and for which demand is expected to increase.
The Yamaguchi refinery has a crude oil processing capacity of 120,000 barrels per day.
