Gasoline demand growth will slow this year due to the growth of electric vehicles in China and the US

By Mohi Narayan

NEW DELHI (Reuters) – Global gasoline demand growth could halve by 2024, putting pressure on refiners' margins in the second half, analysts said, due to a shift to electric cars in China and the United States and a return to normal consumption after last year's rebound following the COVID-19 crisis. -19.

At the slowest growth since 2020, demand is likely to rise by 340,000 barrels per day (bpd) to reach 26.5 million bpd this year, says consultancy Wood Mackenzie, compared with growth of 700,000 bpd last year year, as China approaches the peak. demand for transportation fuels and the US has exceeded it.

“Electric vehicle penetration has increased in the US and China,” said Woodmac analyst Sushant Gupta.

“This year, Chinese demand will grow by only 10,000 barrels per day, due to higher adoption of electric vehicles.”

Consultancy Rystad Energy estimates global gasoline demand at about 26 million barrels per day in 2024, up about 300,000 barrels per day from growth of about 700,000 barrels per day in 2023, fueled by the post-pandemic consumption boom, according to analyst Mukesh Sahdev.

China, once the world's driver of gasoline demand, is expected to account for more than half of all EV sales this year, the International Energy Agency said.

Gasoline consumption by the world's largest crude oil importer is expected to grow by about 1.3%, or about 2 million tons, to 165.1 million tons (3.8 million barrels per day) this year, forecasts show from a research department of China National Petroleum Corp (CNPC). .

The research department of China's largest refiner, Sinopec, expects gasoline demand to rise 1.7%, or about 3 million tons, to reach 182 million tons this year.

As falling prices boost demand, the share of electric cars sold this year could reach 45% in China, around 25% in Europe and more than 11% in the United States, the IEA estimates.

In comparison, booming auto sales, along with high economic growth and low electric vehicle penetration, are driving gasoline demand in India and Indonesia.

India's petrol consumption will reach a new record of 39.2 million tonnes (908,000 barrels per day) in the year to March 2025, up about 5% from 37.2 million tonnes in the year to March 2024, it said according to government estimates.

MARGIN PRESSURE

U.S. gasoline consumption fell to about 376 million gallons per day (8.94 million barrels per day) in 2023 after hitting a record 392 million gallons in 2018, according to the U.S. Energy Information Administration.

Demand is expected to be flat in 2024, analysts said.

As a result, U.S. refining margins are expected to remain under pressure after the busy summer season, Woodmac and Rystad analysts said.

In Europe, gasoline demand will grow by 50,000 barrels per day, or 2.3%, to 2.19 million barrels per day in 2024, in line with recent years, FGE said.

Stagnant European gasoline demand and increasing competition from Nigeria's new Dangote refinery, the largest in Africa and Europe that could add 280,000 to 300,000 barrels of gasoline per day to the global balance, will put pressure on European refining margins, Woodmac said.

Gasoline margins in the United States and Asia are up 85% this year to around $29 per barrel for WTI oil on May 1 and 29% and around $13 per barrel for Brent oil on April 30, respectively, based on expectations of robust summer demand, LSEG data showed.

Margins strengthened early this year due to scattered refinery outages in Asia and the US, while higher freight costs due to attacks on shipping in the Red Sea and Russian energy infrastructure supported European petrol markets. [REF/OUT]

Eurobob gasoline was worth about $23 a barrel of Brent oil on May 1, compared with an average of $19.67 in April last year, the data showed.

(Reporting by Mohi Narayan, additional reporting by Robert Harvey in London and Aizhu Chen in Singapore; Editing by Florence Tan and Clarence Fernandez)

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