China's Gasoline Consumption to Increase 24% by 2010
By David Harman
22 Mar 2007 at 11:45 AM GMT-04:00
SHANGHAI (Interfax-China) -- China's gasoline consumption, spurred by a soaring demand for cars in the world's fastest growing economy, will reach 65.44 million tonnes by 2010, which is a 24.7% increase from 2006, an official from a state industrial planning organization said during an oil trade summit held in Guangzhou.
The country's use of gasoline reached 52.47 million tonnes last year, an 8.4% year-on-year growth, after the year's car sales jumped 27% to hit 7.2 million. The forecast for this year's growth is 18%, according to Bai Xuesong, senior engineer with China International Chemical Consulting Corp., which is overseen by the state-owned Assets Supervision and Administration Commission.
China produced 55.91 million tonnes of gasoline last year. Its largest producers include fourth-largest state oil company Shaanxi Yanchang Oil Group, which is also part of a conglomerate of Shaanxi's major local oil drilling and refining plants, Dalian Petrochemical, under the country's top oil company China National Petroleum Corp., and Zhenhai Refinery of Zhejiang province, which operates under China Petroleum and Chemical Corp., Asia's largest refiner.
The country's gasoline exports fell 37.7% to 3.5 million tonnes last year. The decrease occurred because soaring international crude prices, combined with the government's artificial control of oil product prices, made refining a money-losing business.
Out of China's total gasoline exports, 43% was sent to Singapore last year, followed by Indonesia with 26.21% and Vietnam with 18%.
Fuel oil futures gained upward momentum towards RMB 3,082 (US$399) after crude oil futures hit the highest level of the week overnight in expectation of growing crude demand from refineries after seasonal maintenance work.
Fuel oil futures in Shanghai normally track the performance of crude oil, which continued to consolidate at the $60 a barrel level.
"We expect the crude prices to continue strengthen in the following sessions," said Song Bo from Sanli Futures.
Commentary
A major danger of underestimation in these consumption forecasts. They are assuming a slowdown in growth in the auto industry and no increased usage of existing vehicles. This is at a time when per capital revenue growth continues to increase and, more importantly, is becoming broader based. It would be surprising if gasoline consumption growth up to 2010 was less than 28% and more likely to be nearer 30%.
© InterFax-China 2007.
This article comes from Interfax China Commodities Daily, a daily digest produced by Interfax News Agency in Mainland China. To receive 10 free copies of this, please e-mail david.harman@interfax-news.com.
