Tokyo Gov. Yoichi Masuzoe said the capital's system of stockpiling fuel reserves for emergencies will be overhauled following the discovery that more than ¥300 million worth of fuel purchased from oil retailer associations under the system was not actually being stored.

Masuzoe told a news conference on Tuesday that the present situation is "absurd."

"We will make thorough improvements, or else build a new system from scratch," he said.

Under a February 2013 agreement, the Tokyo Metropolitan Government purchased gasoline, light oil and heavy oil reserves through oil retailer associations to be stored at gas stations and oil depots for use in the event of an earthquake directly hitting the capital.

But sources revealed last week that the retailer associations did not go on to purchase the fuel resources from gas stations and depots, instead pooling most of the money they received from the metropolitan government.

In fiscal 2014, around 900 kiloliters of gasoline and light oil, as well as about 1,850 kiloliters of heavy oil were, supposed to be stored as stockpiles at 122 gas stations and five oil terminal facilities, respectively.

But many operators of gas stations and oil terminals said they had no knowledge of the system and had not set aside fuel for the Tokyo government. Some operators said they had not received funds but were expected to supply fuel in the event of a disaster.

A metropolitan government official has said the "fuel is secured," but many operators of gas stations and oil terminals appear unaware of the system.

If the system fails to work properly, hospitals and emergency vehicles could be left unable to function properly in the wake of a disaster.

Takanori Takashima, a senior official with the associations, has admitted that they had not handled the issue appropriately.