Improving the efficiency and competitiveness of domestic refineries and the sales network

「従前の取り組みを加速化・高度化する施策により稼働率90％以上の安定的達成を目指す」

「While advancing initiatives to stabilize and improve supply, including measures to increase refinery and site utilization rates, we will focus on strengthening sales by using our nationwide network of authorized distributors and service stations. The utilization rate of refineries, sites and refining companies (the Company’s 4 directly operated refineries and sites, plus Toa Oil, Showa Yokkaichi Oil and Fuji Oil) was only 86% of nameplate capacity in 2023–2025, but we aim to raise it to 90% or more by 2030.」

「As a result of the tender offer, Fuji Oil became a consolidated subsidiary of the Company effective 5 November 2025. ① Optimizing the production structure for petroleum products ② Establishing a stable energy supply base from a long-term perspective ③ Strengthening cost competitiveness through the mutual use and integration of the functions and infrastructure of both companies ④ Establishing a supply structure for low-carbon energy」

「Strengthening the competitiveness of refining and manufacturing sites; advancing consideration of the suspension of the refining functions of Seibu Oil Co., Ltd. and the development of CNX centers; capital and business alliance with Fuji Oil Co., Ltd.; and consideration of production optimization through the consolidation of ethylene units in the Chiba area with Mitsui Chemicals, Inc.」

「富士石油株式会社 became an equity-method affiliate as a result of the additional acquisition of its shares, and has therefore been included within the scope of equity-method accounting.」

「In domestic manufacturing and supply, we optimized the Group’s supply structure and, toward the development of CNX centers, suspended the refining functions of the Yamaguchi refinery (Seibu Oil Co., Ltd.) in March 2024. We are also discussing deeper cooperation with 富士石油株式会社 to strengthen the competitiveness of the existing fuel oil business and pursue initiatives aimed at future decarbonization.」

「In petroleum refining, we will continue to invest consistently and efficiently to improve long-term cost competitiveness and equipment reliability, while also restructuring refining capacity in anticipation of declining domestic demand and seeking an optimal refinery structure for the future. We are also developing CNX centers by converting refinery and site functions to achieve carbon neutrality.」

「We will provide value so that customers can make maximum use of the 6,200-location service-station network under the two brands, including the new SS brand apollostation, which began rolling out in April 2021. Specifically, we have envisioned the Smart Yorozuya concept as a new-age general store that enriches the lives of local residents, and have begun providing mobile brain health screening services as part of a business aimed at promoting preventive healthcare based at service stations to address the important issue of health in an aging society.」

「We will provide value so that customers can make maximum use of the 6,300-location service-station network under the two brands, including the new SS brand apollostation, which began rolling out in April 2021.」

「In domestic manufacturing and supply, we worked to create synergies by strengthening network coordination among refineries and sites, comply with the IMO regulations by optimizing facilities and operations, improve refinery reliability through advanced technologies such as AI and IoT, and enhance logistics efficiency.」

「We have already established an environment in which optimal production plans can be formulated for 7 refineries, including 富士石油㈱, by also using integrated LP (linear programming). In addition, by making maximum use of the cokers at 東亜石油㈱ and the Yurika unit at 富士石油㈱, as well as modifying equipment at the Chiba site, we are reducing the Group’s heavy fuel oil production ratio and advancing preparations to comply with the IMO regulations scheduled for 2020.」

「The 6,600-service-station network of the two brands has a complementary relationship in terms of location. …In spring 2019, we will introduce a loyalty program using a new smartphone app and a customer management program using a database… We will also optimize the logistics system, improve services and address the lower density of logistics demand and shortages of on-site personnel by using digital technology (ICT) to link information on shipment forecasts, service-station inventories, vessels, tanker-truck operations and other matters in an advanced, real-time and two-way manner.」

「In petroleum refining, we will continue to invest consistently and efficiently to improve long-term cost competitiveness and equipment reliability. Through these efforts, we aim to maintain a group of refineries with refining capabilities that can compete with the latest refineries in the Asia-Pacific region and that continue to meet society’s needs. We have already established an environment in which optimal production plans can be formulated for the Group’s 7 refineries by also using integrated LP (linear programming). In addition, by making maximum use of the cokers at Toa Oil and the Yurika unit at Fuji Oil, as well as modifying equipment at the Chiba site, we have reduced bottoms across the Group and completed preparations to comply with the IMO regulations scheduled for 2020.」

「To establish a competitive production structure, the Chiba Refinery and plant were consolidated into a single site in October 2017. At the Aichi Refinery, a reformate gasoline and xylene recovery unit was completed to enhance the value of gasoline fractions.」

「In accordance with the second notification under the Act on Sophisticated Methods of Energy Supply Structures, the company reduced crude distillation unit capacity by 10 thousand barrels per day at the Hokkaido Refinery, 10 thousand barrels per day at the Chiba Refinery and 15 thousand barrels per day at the Aichi Refinery by the end of March 2017. In addition to responding to changes in the domestic supply-demand balance amid a gradual decline in demand, the company decided to integrate the Chiba Refinery and plant in fiscal 2017 to establish a competitive production structure.」

「In light of the gradual decline in domestic demand, the company reduced the crude distillation unit capacity at its Chiba Refinery by 20 thousand barrels per day in April 2015, while increasing product import capacity in Hokkaido to improve its flexibility in responding to changes in the domestic supply-demand balance.」