Government plans to submit three bills to secure resources in extraordinary session of parliament due to Strait of Hormuz blockade

In response to the de facto closure of the Strait of Hormuz, the government has compiled three bills related to securing resources, including support for diversifying crude oil procurement, and has decided to submit them to an extraordinary session of the Diet in the fall. This is the first time the government has enacted full-scale legislation aimed at strengthening resource security since the US-Israel attack on Iran at the end of February.

This was revealed through interviews with government officials. The plan is to submit the bill to an extraordinary Diet session scheduled to convene on October 5th. With the Strait of Hormuz in mind, the new law to encourage the diversification of crude oil procurement will create a system to provide subsidies to primary oil distributors who import crude oil without passing through specific "choke points." Funds for the grant will be collected from each company in the form of payments based on the amount of petroleum products they sell and use domestically.

Alternative procurement involves using pipelines to ports outside the Strait of Hormuz or distributing procurement from multiple regions, which incurs additional costs.

The subsidy system is intended to support these additional costs and encourage crude oil procurement that does not rely on specific routes during normal times. However, if wholesalers pass on the tax to prices, it could lead to a burden on the public.

The government compensates a portion of the insurance money

The government will also submit a bill to introduce a system that would allow the government to reimburse non-life insurance companies for a portion of the amount needed to pay insurance claims related to insurance taken out by shipping companies that transport crude oil.

Non-life insurance companies pay huge amounts...