China’s Gasoline Demand to Keep Falling, Sinopec Says

(Bloomberg) -- China’s biggest oil refiner said the country’s gasoline demand had peaked last year and declines would accelerate as the shift to electric vehicles gathers pace.

Consumption of the fuel would dip around 1% this year before dropping further from 2025, Sinopec Economics & Development Research Institute said in an annual report released on Thursday. The institute reiterated a forecast from last year that China’s overall oil demand would top out at around 800 million tons a year no later than 2027.

The coming peak in oil demand from China, the world’s biggest crude importer, will erode a major pillar of consumption worldwide, although there’s still considerable debate about how fast it will tail off. While the use of road transport fuels looks set to drop, demand for plastics and jet fuel is still rising. 

“Petrochemical-driven demand will cushion declines from road fuels,” said Luo Daqing, head of the institute. “Refiners will have to shift focus to lifting chemical yields. We see the growth of oil-powered cars stalling after 2025.”

Chinese diesel demand, which peaked in 2019 and then plateaued, would fall by more than 5% this year, Sinopec said. However, aviation fuel consumption would keep rising through 2040, it said.

China National Petroleum Corp., sees an earlier peak for the country’s oil demand than its peer Sinopec. It said this month that consumption would top out at 770 million tons in 2025, five years earlier than its previous forecast. 

Some key numbers from the Sinopec report: 

--With assistance from Sarah Chen.

(Corrects forecasts on gasoline and diesel demand in 2025 after Sinopec revised numbers.)

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