Japanese Gas Stations Diversify

Recent deregulation allows gas stations to diversify the products they sell, as fuel demand falls.

August 07, 2020

TOKYO—Falling demand for fuel has gas stations all over the world scrambling to find new ways to bring in revenue. In Japan, recent deregulation under the Fire Service Act now allows gas stations to display and sell other products on the premises, including used automobiles, Japan Times reports.

“The coronavirus crisis caused the equivalent of 10 years of falling demand,” said a senior official of the Petroleum Association of Japan. However, 70% of gas stations run by small and mid-size operators making wholesale business changes might prove to be too challenging.

Demand for gasoline in Japan was already on the downward spiral when the pandemic hit. The number of gas stations had plummeted from 60,000 in March 1995 to 30,000 in March 2019. A national association of gas station cooperatives said demand for gasoline dropped 30% between mid-April and late May compared to the same time period in 2019.

While demand has rebounded as the government lifted restrictions, levels will probably stay low. Demand for gasoline “is unlikely to recover to the levels before the coronavirus outbreak,” said Tsutomu Sugimori, chair of the Petroleum Association of Japan. “If demand remains weak, we may see a series of bankruptcies of gas stations in autumn and beyond,” added a senior official of the gas station association.

In mid-April, Yamauchi Sekiyu, which operates a station in Saijo, Ehime Prefecture, began selling used cars at two of its three stations. The company used to only do online sales. “Many customers still don’t know they can buy vehicles at our stations,” Akimasa Yamauchi, president of Yamauchi Sekiyu. “We want to build [vehicle sales] into a top moneymaker.”