Idemitsu Kosan Co.,Ltd.

Business Details

The Fuel Oil segment's main businesses are the production, sale, import/export, and trading of petroleum refined products such as gasoline, diesel, kerosene, and jet fuel. Based on domestic refineries, it supplies customers in Japan and overseas, and is the core segment accounting for approximately 84% of the Group's total net sales. In November 2025, the company made Fuji Oil Company, Limited a consolidated subsidiary (final voting rights ratio of 92.49%), and is promoting the integration and optimization of its refining structure. The introduction of next-generation fuels (biodiesel, renewable diesel, SAF, etc.) is also underway.

Recent Overview

Income improved significantly due to the positive time-lag effect from the surge in crude oil prices, and asset scale also expanded due to the consolidation of Fuji Oil.

In FY2026 (ending March 2026), net sales in the Fuel Oil segment decreased to ¥6,807,275 million (down 11.7% year on year) due to the impact of falling crude oil prices, while segment income increased significantly to ¥177,678 million (up 45.5% year on year) due to the positive time-lag effect from the surge in crude oil prices caused by the blockade of the Strait of Hormuz. In addition, segment assets expanded to ¥3,649,172 million following the consolidation of Fuji Oil Company, Limited as a subsidiary on November 5, 2025 (final voting rights ratio of 92.49%). A gain on negative goodwill of ¥492 million was recorded as extraordinary income. Although there was an increase in costs such as large-scale periodic maintenance, the time-lag effect exceeded this.

Key Products

Growth Drivers

• Integration and optimization of the refining structure and pursuit of synergies through the consolidation of Fuji Oil Company, Limited as a subsidiary (voting rights ratio of 92.49% at the end of FY2026) (optimization of petroleum product production structure, strengthening of cost competitiveness, establishment of a low-carbon energy supply structure)
• Boosted profits through the positive time-lag effect during a surge in crude oil prices amid geopolitical risk situations such as the blockade of the Strait of Hormuz
• Cultivation of new revenue sources through the launch of sales and establishment of supply systems for next-generation fuels (biodiesel, renewable diesel, SAF)
• Revenue diversification through the expansion of overseas trading business
• Strengthening of customer touchpoints and expansion of non-fuel revenue through the "Smart Yorozuya" transformation of the SS network

Risks

• A structural risk in which the impact of inventory valuation due to declines and fluctuations in crude oil prices (time-lag impact) greatly affects profit and loss (in FY2026, net sales decreased significantly due to a decline in crude oil prices of $6.7/barrel year on year)
• Long-term decline in domestic petroleum product demand (a gradual downward trend due to structural changes such as a decrease in the number of passenger vehicles owned, fuel efficiency improvements, and logistics efficiency improvements)
• Risk of temporary cost increases due to an increase in large-scale periodic maintenance expenses (this also emerged as a cost increase factor in FY2026)
• Risk of increased interest-bearing debt and higher financial leverage due to the consolidation of Fuji Oil Company, Limited as a subsidiary (consolidated total assets expanded to ¥5,328,792 million)
• Instability in crude oil procurement costs due to geopolitical risks in the Middle East (Iran situation, blockade of the Strait of Hormuz, etc.)
• Medium- to long-term risk of shrinking fossil fuel demand due to the progress of carbon neutrality policies