ECO cars spell the end for an industry?

On 15th March 2010, the Yomiuri reported that

"the spread of eco-friendly vehicles could spell doom for about two-thirds of the nation's 40,000 gas stations in the next decade, and, according to one observer, even render some rural communities uninhabitable.

More than 2,000 gas stations have been closing down annually in recent years, but this figure looks set to jump as more drivers opt for green cars that run on less fuel--or none at all.

The Federation of Petroleum Product Dealers Associations (Zensekiren) estimates that if eco-friendly vehicles account for half of new car purchases and 20 percent of all vehicles in fiscal 2020, annual demand for gasoline will plunge to 40.88 million kiloliters, down 29 percent from fiscal 2008, while demand for light fuel oil will fall 15 percent to 28.66 million kiloliters.

"In the worst-case scenario, only about 12,500 of the nation's gas stations, or fewer than one-third of the current figure, would still be operating in fiscal 2020," said an executive of Zensekiren, a nationwide body with a membership of about 20,000 petroleum product retailers.

The demise of gas stations would be felt particularly keenly in mountainous areas and rural regions, where people tend to rely on vehicles for getting around during their everyday life. Gas stations are often at the heart of communities as the sole suppliers of kerosene and fuel for farm equipment.

The central and local governments have started studying ways to stop gas stations from falling by the wayside in communities where their absence could endanger people's livelihoods.

The village government of Hinoemata, Fukushima Prefecture, has been extending financial support to the village's lone gas station. If it closed down, the nearest gas station would be 30 kilometers away.

Many towns and villages face a similar plight--and their very existence could be at stake.

"Lots of local communities would become uninhabitable if they had no gas station," Toyo University Prof. Masatoshi Kojima of the school's business administration department has warned.

Representatives of the private and public sectors, including officials from the central government, held a meeting Feb. 25 to discuss the endangered gas stations and support measures some local governments are providing to keep the gas pumps pumping in their areas.

Installing battery rechargers for electric vehicles and repairing green cars at gas stations--in effect, turning eco-vehicles from foe to friend--could be one option for the petroleum product retail industry.

However, a high-speed recharger costs about 10 million yen to install and at least 1.9 million yen a year to maintain. That is a big outlay many gas stations are reluctant to make considering they can only expect to set recharging fees at about 500 yen per vehicle.