Japan Power Retailers Halt New Industrial Clients on Fuel Risks
(Bloomberg) -- At least two of Japan’s biggest power retailers have temporarily stopped accepting new industrial clients, pending greater clarity on fuel markets upended by the war in the Middle East.
Tokyo Gas Co., which supplies gas and electricity to the nation’s capital, suspended acceptance of new clients for industrial power use from March 6, a company spokesperson said. With the ongoing conflict affecting procurement costs, the company has yet to decide when it will resume taking on new customers, the spokesperson said.
Eneos Power Corp., the power-retail unit of oil refiner Eneos Holdings Inc., has also temporarily stopped taking requests from new clients for industrial use, according to its website. A company spokesperson declined to comment further.
The temporary restrictions apply only to industrial electricity users. Both companies are continuing to take on new clients for comparatively low-voltage household use.
The US-Israeli war with Iran has resulted in the near-closure of the Strait of Hormuz, the strategic waterway that’s normally a transit point for a fifth of the world’s oil and liquefied natural gas. This, along with the destruction of key energy infrastructure in the region, has affected the Japanese power market, which relies heavily on fossil-fuel imports to generate electricity.
Japan’s power retailers have suspended acceptance of new clients before, for example when the Russian invasion of Ukraine sent fuel prices skyrocketing. Such measures can threaten efforts by factories and other large power consumers from securing enough electricity.
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