Bid prices for municipal fuel may have to be raised for July to September if the current supply disruption to municipal services, particularly public transit and sewage, persists, Nikkei Asia reported, citing a government official.

The official noted that fuel for the January-March period was already secured by the municipal bus sector at 199 yen per litre, nearly double the previous quarter's price, amid a global crude oil surge, the news agency said.

A tender in Japan's Tochigi Prefecture for heavy oil used in sewage treatment failed on March 24 after wholesalers withdrew amid supply disruptions and sharp price hikes, the publication said.

While the government helped coordinate with distributors to secure heavy oil for April, talks for May and beyond are still ongoing, it added.

Similar bidding failures occurred in Nagoya for diesel fuel for buses, and in Yokohama for kerosene and heavy oil used in rainwater drainage pumps, though April-to-June supplies in Yokohama were later arranged through negotiated contracts, the news daily said.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)