Economic slowdown is feared in Japan after the consumption tax hike on 1st April. Can we see any impact on the energy consumption before and after the tax rate hike?
Crude oil processing typically rises before summer and winter demand seasons, then starts decreasing toward maintenance seasons.
March is known as a time to start decreasing of demand in the cycle, however, strong fuel demand from the transportation sector sustained the crude oil processing rate last month. Transporters delivered large volume of goods for rush demand before the tax hike.
Crude oil processing in Japan had slowed down after December last year, and decreased on year in February. Although the processing rate rebounded to 3.9% on year of increase in March, it slipped again to the negative level in early April.
After the severe earth quake in March 2011, monthly electricity supply by Tokyo Electric Power Company usually has been decreased on year by the power saving efforts. But the electricity supply in February & March rose from a year ago.
Strong power demand in February was likely supported by chilly weather, however, the demand in March increased by 3.9% on year despite temperatures exceeded the previous average. Then its electricity supply in the first twelve days in April fell to 2.5% on year.
Data on the energy supply apparently show that the industrial activity in Japan increased in March, but can we assert recent declines in April as the strong reaction to it?
Crude oil throughput fell 0.5% on year against the 3.9% of increase in March, and the decrease rate of electricity supply in April is half of increase rate in the prior month.
Although we still need to keep watching the situation, it seems that there is no rapid extreme reaction after the tax rate hike.