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Jan. 06, 2022 TOCOM The impact of the Mitigation Program of Japanese Government against extreme fluctuation of fuel price to TOCOM Futures Markets (oil products)

 

As a measure against extreme fluctuation of fuel price during the pandemic of COVID-19, Japanese government announced the launch of mitigation program which will provide a certain amount of subsidy to the wholesale companies and import companies who support this program when the price of gasoline exceeds the reference price. TOCOM hereby share the inquiries we received with regard to this program and our answers reflecting the comments from the Agency for Natural Resources and Energy as below.
Please share this information with the relevant departments at your company.


Q1：How the program affects TOCOM gasoline futures market?
A1：The wholesale companies and import companies who support the program will receive certain amount of subsidy for the selling in spot market when the price of gasoline exceeds the reference price.
It is the same for the selling in futures market, the wholesale companies and import companies who support the program will receive a subsidy when the price of gasoline exceeds the reference price at the time of execution of the order. Therefore, the wholesale companies and import companies who support the program may place a sell order at the price considering the amount of subsidy they will receive.

Q2：How will the Exchange handles the subsidies provided by the government in the delivery process?
A2：The delivery process will be carried out in accordance to the existing rules, regardless of the subsidy amount, the existence of wholesale company or import company as a seller, or whether they support the program or not.

Q3：What will happen if the conditions to give subsidy have been fulfilled on the delivery day?
A3：The government gives subsidy if the conditions are met at the time of execution. Otherwise, no subsidies will be provided even if the conditions have been fulfilled in the week of delivery day. The delivery process will be carried out in accordance with the existing rules.

Contact

TOCOM　Business Operations Dept (Market Planning)
TEL:+81-50-3361-1529
E-mail:tocom_mp@jpx.co.jp


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