TOKYO, Jan 14: Japan’s $20-billion-a-year retail city gas markets should be fully liberalised in 2017 to foster competition and curb user fees, the country’s trade ministry committee has recommended in a report. City gas sales to large industrial users, accounting for 62 percent of total sales, were earlier liberalised in stages starting from 1995. Now, the committee said, the remaining portion of the market – more than 25 million households and small businesses representing 2.4 trillion yen ($20 billion) in annual sales – should be opened up beyond the regional monopolies who now control it. About 35 companies, including power utilities and oil firms, have already entered the city gas markets for large users, and the same are likely to enter the retail gas market, too, when it is liberalised, industry sources said. The increased competition would likely push down Japan’s residential retail gas prices, which are now about four times as expensive as in the United States. The trade ministry is set to introduce a bill based on the committee’s recommendations in the next Diet session, which starts on Jan. 26.
Naohiko Yokoshima, the ministry’s director of the gas market division, said the government and ruling parties would make the final decisions on how to allocate existing infrastructure and pipeline networks. The committee had discussed separating the pipeline networks of major suppliers, Tokyo Gas, Osaka Gas and Toho Gas, but it failed to reach a conclusion, leaving the task in the hands of the government and policymakers. At the end of 2013, Japan decided to liberalise the 7.5 trillion-yen-a-year power market for homes from 2016, a process prompted by the Fukushima nuclear crisis that may end with the break-up of powerful regional monopolies. (AGENCIES)
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