China's gasoline, jet fuel use to hit record in 2021 despite COVID cloud

Reuters reports that analysts said that China’s fuel demand is on track to hit record highs this year on a rebound in car sales and booming domestic air travel.

Despite slowing growth for diesel, the main industrial fuel, overall consumption of gasoline, diesel and aviation fuel in the world’s top crude oil importer is expected to grow by 7% to 11% in 2021 to a record between 8.4 million and 8.9 million barrels per day, analysts at consultancy SIA Energy, IHS Markit and Energy Aspects estimated.

By comparison, the International Energy Agency (IEA) in March forecast China’s demand for gasoline, jet fuel and diesel would rise by 6.5% to 8.2 million bpd in 2021.

China’s strong growth in fuel use has helped stoke a 50% jump in global crude oil prices from 2020.

The latest outbreaks of the COVID-19 Delta variant across 17 provinces are expected to constrain travel in the near term, but analysts say the overall growth trend remains intact.

Gasoline demand, which accounts for a quarter of China’s refined fuel use, is forecast to rise by 11% to 13% this year to a record 3.8 million to 4.1 million barrels per day, well above the IEA’s March forecast of 3.5 million bpd.

New passenger vehicle sales are expected to rise 7% this year, marking China’s first annual growth since 2017, said Tao Gao, light vehicle specialist with IHS Markit.