- Tohoku Electric buys cargo just below $10 per million Btu
- Provides some relief to policymakers grappling with CPI
According to Bloomberg article published on May 19, 2023, a Japanese utility paid the least for spot liquefied natural gas in more than two years, potentially limiting the impact of electricity rate hikes that threaten to boost inflation.
Tohoku Electric Power Co. bought a shipment for late July at a rate just below $10 per million British thermal units on Thursday, according to traders with knowledge of the matter. That’s a third of the price it paid for a December cargo of the power-station fuel.
Global LNG prices are plummeting after a mild northern hemisphere winter left utilities with ample stockpiles, a reversal from last year’s energy shortage that triggered a record-breaking rally. Lackluster demand from China is also weighing on prices. Several Japanese utilities are so well supplied they are offering to resell spare shipments on the spot market, according to traders.
The lower cost for the power-station fuel may help partially offset the increase in regulated power tariffs, after they were allowed to rise by 14% to 42% earlier this week. That could offer some relief to policymakers battling a resurgence in consumer prices.
