Type to search

China’s fuel demand still well below last year

BEIJING: China’s refined oil product consumption picked up in the second quarter as industry and transport demand improved after the peak of the coronavirus epidemic, according to the national energy bureau, but was still well below levels a year earlier.

After falling about 19% in the first quarter compared with January-March 2019, the National Energy Administration (NEA) said on Friday: “In the second quarter, the contraction narrowed by 6 percentage points.”

The NEA did not provide a breakdown of consumption of refined oil products in a briefing in the capital disclosing the percentage changes.

China has  gradually relaxed travel restrictions within the country since April, restarted industrial production and increased investment in infrastructure projects once the peak of the coronavirus outbreak passed.

Data released on Thursday indicated its April-June crude oil throughput reached 13.62 million barrels-per-day (bpd), up from 11.98 million bpd in the first quarter and exceeding 12.96 million bpd in the same period last year.

“Diesel consumption started to see year-on-year growth since April and gasoline since June. The recovery of fuel demand is expected to continue in the second half this year,” said Wang Lining, a senior analyst at a think-tank affiliated to China National Petroleum Corp (CNPC), speaking earlier this week.

Analysts at the CNPC think-tank estimate gasoline consumption will reach 73.77 million tonnes in the second half of 2020, up 3.5% from a year earlier, while diesel consumption will hit 85.69 million tonnes, up 2.5%.

The NEA on Friday also said China’s electricity consumption rose 3.9% in the second quarter from a year ago, while natural gas use also exceeded last year’s level.

ALSO SEE: China power, transport data confirm rebound 

Meanwhile, the Uzbek president said on Thursday that the Central Asian country’s gas exports to China had fallen to a third of their previous levels, and stopped completely to Russia due to the coronavirus pandemic.

The UZA state news agency cited comments by President Shavkat Mirziyoyev at a government meeting, saying that Uzbekistan would be looking to diversify its gas sector after it was dealt a severe blow by the pandemic, causing an “unstable situation” for the commodity-rich country.

Uzbekistan exports around 10 billion cubic metres (bcm) of natural gas to China a year. 

The country sold 4.9 bcm to Russian state energy giant Gazprom in 2019, according to Gazprom’s annual report. 

Beijing’s PetroChina, China’s largest oil producer, reportedly issued a force majeure notice to a number of gas suppliers in March as a result of China’s coronavirus battle, which sapped industrial demand. It said it lost $2.29 billion in the first quarter.

It is not clear to what extent the pandemic has affected China’s purchases of gas from another Central Asian country, Turkmenistan, which exports over 30 bcm annually to China. 

With reporting by AFP


AF China Bond