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Japan Taps Oil Reserves, Philippines Cuts Fuel Taxes Amid West Asia Crisis

Japan has initiated the release of 30 days' worth of oil from its state reserves to mitigate the economic impact of the West Asia conflict and soaring prices. The country, which imports over 90% of its crude from the Middle East, is highly vulnerable to supply disruptions from the region. Separately, the Philippines has passed a new law authorizing the president to suspend or reduce fuel excise taxes when global oil prices exceed a set threshold. These measures in both nations are designed as flexible tools to protect consumers and economies from volatile energy markets.

Key Points: Japan Releases Oil Reserves, Philippines Enacts Fuel Tax Law

  • Japan releases 30 days of state oil reserves
  • Philippines enacts law for temporary fuel tax cuts
  • Both moves aim to cushion economic impact of West Asia conflict
  • Japan also resumes gasoline subsidies to lower prices
  • Supply fears drive sharp rises in crude and retail fuel costs
3 min read

Japan starts releasing state oil reserves to blunt impact of West Asia tensions

Japan releases state oil reserves as West Asia tensions spike prices. Philippines passes law allowing fuel tax cuts to shield consumers from global oil shocks.

"Japan relies on the Middle East for more than 90 per cent of its crude oil imports, leaving it highly vulnerable. - Kyodo News"

Tokyo, March 26

Japan began releasing 30 days' worth of oil from state reserves on Thursday to cushion the impact of the West Asia conflict on its economy, as concerns over supply mount and oil prices soar, local media reported.

The move came after the country started drawing down 15 days' worth of oil from private-sector stockpiles last Monday, reports Xinhua news agency

The government plans to sell a total of about 8.5 million kiloliters of oil from 11 storage bases across the country, according to Kyodo News.

Japan will also begin to tap joint oil reserves held in the country by three Middle Eastern nations, including the United Arab Emirates, with five days' worth to be released by next Tuesday for supply to oil wholesalers.

Japan relies on the Middle East for more than 90 per cent of its crude oil imports, leaving it highly vulnerable to the effective closure of the Strait of Hormuz following the outbreak of the Middle East conflict in late February. The disruption has driven sharp rises in both crude oil and retail gasoline prices in the country.

In addition to tapping oil reserves, the Japanese government also resumed gasoline subsidies to cap fuel costs for consumers. The measure has brought the average retail price for regular gasoline down to 177.7 yen (about 1.11 US dollars) per litre from a record high of 190.8 yen last week, according to Kyodo News.

As of the end of 2025, Japan held an oil reserve equivalent to 254 days of domestic demand.

The impact of the tensions in West Asia is being seen in several nations.

Meanwhile, in the Philippines, President Ferdinand Romualdez Marcos on Wednesday signed a law allowing the government to temporarily suspend or cut fuel excise taxes on petroleum when global oil prices reach a set threshold.

Republic Act No. 12316 authorises the president, upon the recommendation of the Development Budget Coordination Committee and in coordination with the Secretary of the Department of Energy, to act when the average price of Dubai crude oil reaches or exceeds 80 U.S. dollars per barrel for one month.

Under the law, any suspension or reduction of fuel excise taxes may be implemented for up to three months at a time, but not exceeding a total of one year.

The tax rates will automatically revert to their original levels either one week after the one-month average Dubai crude price falls below 80 US dollars per barrel, or after three months have elapsed, whichever comes first.

The measure is designed to give the government a flexible tool to cushion the impact of rising fuel costs on consumers and the broader economy.

The act will take effect in 15 days, and the authority granted to the president under the measure will remain in effect until December 31, 2028.

- IANS

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Reader Comments

P
Priya S
Wow, 254 days of reserves! That's impressive planning. It shows how important stable energy supply is for a developed economy. The Philippines' law to adjust taxes based on prices is also an interesting approach to protect consumers.
R
Rohit P
Global instability always hits the common man hardest. Petrol prices are already so high in India. Hope our government has a similar contingency plan ready if things worsen in West Asia. Jai Hind.
S
Sarah B
Living in India, I see the direct impact of global oil prices on everything from transport to vegetables. While Japan's action is necessary, it's a short-term fix. The long-term solution for all nations, including India, has to be renewable energy. Solar power is the future.
V
Vikram M
Releasing reserves is good, but it's like using your emergency fund. What happens after 30 days? The root cause is the conflict. The international community needs to push harder for peace. Stability in West Asia is in everyone's interest, especially for oil-importing countries like ours.
K
Karthik V
The part about Japan tapping reserves held here by Middle Eastern nations is very strategic. It shows deep energy partnerships. India has also been working on similar long-term deals with producers. Energy diplomacy is as important as having the reserves.
N
Nikhil C

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