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* Gasoline stocks rebound Japan to grant drilling rights in East China Sea

Tokyo : Japan has begun allocating rights for gas exploration in a disputed area of the East China Sea to private companies, its trade ministry said yesterday, a move likely to rile China with ties already at rock-bottom in a dispute over Japan 's wartime past.

Chinese State Councillor Tang Jiaxuan had warned Tokyo a day earlier not to award the drilling rights, saying that doing so would "fundamentally change the issue."

He called the energy feud one of the main bilateral problems along with Taiwan and the dispute over history.

Simmering tensions between the two Asian giants over a range of issues, especially what China sees as Japan 's failure to own up to wartime atrocities, erupted in China at the weekend, with thousands of people taking part in violent protests.

Japan 's top government spokesman, Hiroyuki Hosoda, said the timing of the decision on drilling rights was coincidental.

"This is an issue that was pursued as an industrial issue, it just happened that awarding exploration rights began today," Hosoda told a news conference.

Some media said officials had pressed for a decision before Foreign Minister Nobutaka Machimura goes to Beijing this weekend for talks aimed at seeking a solution to the broader diplomatic impasse.

The process of awarding the rights is likely to take several months and a decision on whether to start actual drilling would be made separately by the firms.

Japan Petroleum Exploration Co. Ltd (Japex) and Teikoku Oil Co said earlier this year that they would like to start exploring for oil and gas in the East China Sea as soon as possible if they got a government go-ahead.

The two neighbours have been at odds over China 's exploration for natural gas near an area Japan claims as its own exclusive economic zone.

Tokyo on April 1 reiterated its demand that China halt the exploration and provide data on its gas development projects in the area, giving Beijing about a week to provide a "sincere" response before Japan would start awarding gas exploration rights.

Tokyo has expressed concern that gas field development by China would draw reserves from geological structures that stretch under the seabed into its economic zone.
The two governments disagree on the location of the boundary between their respective zones.

Tokyo (Reuters) Japan 's gasoline stocks rebounded from four-month lows in the latest week, thanks to the restart of a gasoline-making unit at Nippon Oil Corp after a month-long closure, industry data showed yesterday.

Gasoline stocks rose to 2.23 million kilolitres in the week to April 9, up 4 per cent from the preceding week, the Petroleum Association of Japan said.

Stocks had fallen to 2.15 million kilolitres in the week to April 2, raising concern in the industry that they were approaching the 2 million kilolitres level. Any fall below that point could mean a supply shortage.

Nippon Oil restarted a residue fluid catalytic cracker at its Sendai refinery in northern Japan on April 4. It had shut the 43,000 barrels-per-day cracker on March 5 due to technical trouble.

The average operating rate of Japanese oil refineries was 86.4 per cent in the week to April 9, compared with the previous week's 88.6 per cent.
Taiyo Oil Co shut down an 88,000 bpd crude distillation unit (CDU) at its sole 120,000 bpd Shikoku refinery in western Japan on April 5 for maintenance.

(Source: www.Gulf News)