Changes in the Method of Revising Wholesale Prices for Petroleum Products
- Adjusting Prices in line with the Commodities Markets -

Idemitsu Kosan Co., Ltd. (Headquarters: Chiyoda-ku, Tokyo; President: Akihiko Tembo; hereafter "Idemitsu") hereby announces that it will change to a method of revising wholesale prices for petroleum products on a weekly basis based on indicators such as commodities market prices on the Tokyo Commodity Exchange (hereafter "TOCOM") beginning in October 2008.

(1) In the past, Idemitsu had implemented uniform wholesale price revisions for all petroleum products twice every month, based on crude oil prices and foreign exchange rate fluctuations. Under this method, however, it has been difficult to respond flexibly against price fluctuations and changes in supply and demand in the commodities market which are specific to each type of product, particularly at a time when crude oil prices have rapidly exceeded over $100 per barrel and have shown significant volatility.

(2) The new wholesale price revision method calls for price revisions on a weekly basis based on the market prices of each product, allowing for rapid responses to price fluctuations on a per-product basis. Idemitsu also believes such price revisions will prove to be more convincing to its business partners and consumers.

(3) Idemitsu will continue to make proactive use of TOCOM indicators going forward in order to promote their liquidity and transparency as indicators of the domestic petroleum products market. Idemitsu will engage in efforts to ensure that the transition to the new wholesale price revision method will promote the creation of such a fair and transparent market and gain the support of its business partners and consumers.

(1) Transition Date
Products shipped on and after October 1, 2008

(2) Revision Method
The prices delivered by tank truck to each business partner will be calculated. Logistics, brand, and other expenses will be added to the prices based on a consideration of TOCOM and products wholesale price information from major research companies.

(3) Revision Period
Wholesale price will be revised on a weekly basis.
Transaction prices for the following week (Monday to Sunday) will be notified to each business partner every Thursday, based on market assessment over the latest announcement.

(4) Products
Gasoline, kerosene, diesel oil, heavy fuel oil A

(1) Product Prices
The price differences between the current week and the following week will be announced for each product (national average).

(2) Related Information
Information on petroleum supply and demand will be properly disclosed.
Ex.: Product inventory, status of imports/exports, etc.

(3) Announcement Dates
Announcements will be made every Friday.