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Gasoline Demand Growth Expected to Slow in 2024 Due to Electric Vehicle Adoption

Analysts anticipate a significant slowdown in global petrol demand growth in 2024, potentially halving from the previous year’s increase. This projection is driven by several factors, including the accelerating shift to electric vehicles (EVs) in major markets such as China and the United States, as well as a return to normal consumption patterns following the bounce-back experienced after the COVID-19 pandemic.

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Consultancy firm Wood Mackenzie forecasts that global petrol demand will increase by approximately 340,000 barrels per day (bpd) in 2024, reaching a total of 26.5 million bpd. This growth is notably lower than the 700,000 bpd increase observed in the previous year. Factors contributing to this slowdown include China approaching peak transport fuel demand and the United States surpassing it, driven by higher EV adoption rates.

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Analysts point out that the penetration of electric vehicles is steadily increasing in both the U.S. and China, resulting in reduced growth expectations for petrol demand in these markets. For instance, Chinese demand for petrol is projected to grow by only 10,000 bpd in 2024 due to the higher uptake of EVs.

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Another consultancy, Rystad Energy, estimates global gasoline demand at approximately 26 million bpd in 2024, up by about 300,000 bpd from the previous year. This growth is attributed to the consumption surge following the pandemic.

In China, which was previously a significant driver of gasoline demand, more than half of all EV sales are expected to occur in 2024. As a result, gasoline consumption growth in China is forecasted to be relatively modest compared to previous years.

On the other hand, India and Indonesia are experiencing growing gasoline demand driven by booming car sales, strong economic growth, and low EV penetration rates.

In the United States, gasoline consumption is expected to remain flat in 2024, putting pressure on refining margins, particularly after the peak summer driving season. Similarly, European petrol demand is projected to experience limited growth, leading to margin pressure due to rising competition and stagnant demand.

Overall, gasoline margins have experienced fluctuations this year due to various factors such as refinery outages, higher freight costs, and geopolitical tensions affecting energy infrastructure. Despite short-term fluctuations, the broader trend suggests a slowdown in gasoline demand growth as EV adoption continues to expand globally.

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