Fuel demand in China and India has experienced growth to start 2019, Kallanish Energy reports. Opec's Monthly Oil Market Report (Momr) showed oil demand is growing in both countries.
China’s figures rose by 0.40 million barrels per day (Mmbpd) in January, compared to the same period in 2018. India's oil demand accelerated by 0.31Mmbpd year-over-year (y-o-y), with total consumption over 5 Mmbpd.
In China, gasoline demand continued to grow in January compared to previous months, reaching total consumption of 3.03 Mmbpd. The jump was due to increased driving for the lunar New Year holidays, according to the Momr. The trend in car sales, however, declined by 14% y-o-y in January, marking the seventh month of falling sales.
In India, gasoline was the third-highest petroleum product for gains in January in terms of product mix, after diesel fuel and liquefied petroleum gas (LPG). Gasoline demand increased by 0.08 Mmbpd, which is 13% y-o-y. Total consumption was 0.66 Mmbpd.
More India consumers were encouraged to use gasoline because of a diminished difference between diesel fuel and gasoline retail prices. An improved economy in rural and urban areas, along with a better road network also led to more traffic. However domestic car sales dropped due to financing restrictions.
The Momr projects Chinese oil demand will increase by 0.34 Mmbpd in 2019, as the petrochemical sector and the overall economy are expanding. However, growth could be impacted by policies encouraging the use of cleaner fuels.
In India, there may be steady improvement in the economic outlook, especially with general elections coming up in Q2. Gasoline for transportation is expected to keep leading oil demand growth.