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Fuel demand drops 23% during pandemic

fuel demand drops 23 during pandemic - Fuel demand drops 23% during pandemic

THE Department of Energy reported a 22.8% drop in total petroleum demand in the six months to June, with fuel imports declining by 35.4%.

The department’s Oil Industry Management Bureau said in a report that demand for petroleum products was 10.794 billion liters at the end of June, down from 13.978 billion a year earlier.

“The decrease is attributed to reduced economic activity due to lockdown and travel restrictions because of the pandemic,” the bureau said.

Demand for diesel oil and gasoline dropped by 21.3% and 20.2%, respectively. Liquified petroleum gas demand fell by 4.6%.

About a quarter of the fuel products on the market are consumed in Metro Manila, followed by Northern and Southern Luzon. Mindanao accounted for 15.23% of demand, while the Visayas took up 14.18%.

The country’s big three oil companies — Petron Corp., Pilipinas Shell Petroleum Corp., and Chevron Philippines, Inc. — serviced 49.25% of the market, with the remainder supplied by independent retailers and direct importers.

Petroleum import volume in the first six months of 2020 fell to 5.954 billion liters, against 9.209 billion a year earlier.

Diesel and gasoline remained the top imports, but volume fell 45.8% to 2.125 billion liters and 21.6% to 1.383 billion liters, respectively.

Petron and Pilipinas Shell, both of which closed their refineries in May, posted a 19% decrease in combined output to 3.878 billion liters in the period. 

“This observation is consistent with the observed decrease in demand in the liquid fuels retail outlets with the implementation of the enhanced community quarantine,” the bureau said.

In August, Pilipinas Shell decided to permanently close its 110,000-barrel-per-day (bpd) refinery in Tabangao, Batangas amid worsening refining.

The facility will be converted into an import terminal to continue supplying fuel products for its stations across Luzon and northern Visayas.

Petron on Wednesday confirmed a report which said that it is also considering permanently closing its 180,000-bpd refinery in Bataan. It was supposed to resume operations last month. The collapse in prices amid depressed demand drove the company to a P14-billion net loss in the first half.

Last month, the International Energy Agency said global oil demand growth is slowing with the latest round of coronavirus disease infections affecting many countries, the adoption of more localized quarantine protocols, and continued work-from-home schemes.

Global fuel demand has reverted to 2013 levels at 91.7 million bpd, it said. — Adam J. Ang

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