Growth of electric vehicles to slow global gasoline demand in China, US
- In Reports
- 03:18 PM, May 06, 2024
- Myind Staff
Analysts predict a significant slowdown in the trajectory of global petrol demand for 2024, potentially halving the growth rate compared to previous years.
Reuters reports that the shift is primarily attributed to the increasing adoption of electric vehicles (EVs) in major markets such as China and the US, alongside a return to pre-pandemic consumption levels following last year's bounceback.
According to consultancy firm Wood Mackenzie, the lowest growth since 2020 is forecasted, with demand expected to increase by 340,000 barrels per day (bpd) to reach 26.5 million bpd this year. This marks a decrease from the 700,000 bpd growth observed in 2023.
The trend holds significance as China nears peak transport fuel demand, while the US has already exceeded it. Analyst Sushant Gupta from Wood Mackenzie highlighted the influence of electric vehicles in shaping demand dynamics, especially in the US and China.
"The penetration of electric vehicles has been increasing in the US and China," he stated, emphasising the impact on gasoline demand. Chinese growth in this regard is expected to be a mere 10,000 bpd this year due to higher EV uptake.
Rystad Energy forecasts global gasoline demand to hit around 26 million bpd in 2024, a slight uptick of approximately 300,000 bpd from the previous year. This growth, fueled by the post-pandemic consumption surge, highlights a shifting landscape with EVs gaining prominence.
China, once a major driver of global gasoline demand, is witnessing a transition towards EVs. The IEA predicts that China will represent over half of all EV sales in 2024.
Despite this shift, gasoline consumption in China is expected to see some growth, with CNPC projecting a 1.3% rise to 165.1 million metric tons (3.8 million bpd) and Sinopec expecting a 1.7% increase to 182 million tons, according to forecasts by their research arms.
Global gasoline demand is rising despite falling prices, driven by strong demand in regions like China, the US, India, and Indonesia. India is expected to achieve a new record in petrol consumption, with estimates projecting a 5% increase to 39.2 million tons by March 2025.
Gasoline consumption is stabilising in the US, putting pressure on refining margins post-summer driving season. Europe faces mixed prospects, with FGE forecasting 2.3% growth in demand but challenges from new competition and stagnant demand.
Wood Mackenzie warns of increased pressure on European refineries due to competition and geopolitical factors. Despite challenges, US and Asian gasoline margins have surged by 85% driven by summer demand, while Europe's margins remain pressured by competition and geopolitical tensions.
Image source: WION News
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