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Australian oil consumption

Hydrocarbon Engineering,


According to Business Monitor International (BMI), oil consumption has continued on the uptrend alongside Australia’s economic and population growth. Between 2003 and 2013, the country witnessed a 27.9% increase in oil demand from 888 030 bpd to 1.14 million bpd. This was mainly the result of economic and population growth.

Oil took up the largest share of Australia’s final energy consumption, at approximately 37.1% in 2012 – 2013 according to the Bureau of Resources and Energy Economics (BREE). The transport sector, which accounted for 37.9% of total final energy consumption in Australia, has been the largest consumer of oil. It is followed by the manufacturing sector.

Given that transport is the main source of oil consumption, motor gasoline and diesel formed the majority of Australia’s oil consumption. The latest figures released by BREE for petroleum product sales in the period 2013 – 2014, showed that motor gasoline and diesel made up 33.0% and 41.9% of total refined oil sales in the country respectively.

Within the gasoline market, regular unleaded gasoline – up to 150 ppm – remains the most consumed product in Australia. Its lower cost will see it remain more competitive relative to premium unleaded gasoline (50 ppm), until the country decides to align gasoline to Euro-V standards, according to BMI. In New South Wales (NSW), legislation that at least 6% gasoline sold at the pumps must be ethanol has allowed ethanol-blended fuel to be the second most popular choice of motor fuel in the state.

Growth slowdown anticipated

BMI forecasts that oil consumption will continue to trend upwards, but at a slower rate for the following reasons:

Slower GDP growth

BMI’s Country Risk team has forecast that the Australian economy will grow at an average of 2.8%/y between 2014 and 2023, lower than the 3.1% seen between 2003 and 2013. A large reason is the expected mining growth slowdown; a significant fall in the growth rate of the mining industry value from an average of 18.6%/y between 2009 and 2013 to 4.0%/y between 2014 and 2018, is expected. Given that industry and mining jointly accounts for approximately 20% of total oil consumption, slower economic and sector growth will also lead to lower oil demand growth rate in Australia.

Slower car sales growth

A radical slowdown is expected in Australia vehicle sales, which would also slow the rate of increase in the Australian fleet on the road. Between 2014 and 2018, BMI projects that sales will rise by an average of only 0.6%/y, as opposed to 7.8%/y between 2009 and 2013. Moreover, growing fuel efficiency in newer cards could also slow oil demand growth in the transport sector.

For these reasons, BMI holds that total oil consumption will modestly increase by an average of 0.9%/y between 2014 and 2023. Demand will continue to climb to 1.15 million bpd in 2014, rising steadily to 1.19 million bpd in 2018 and 1.24 million bpd in 2023.


Adapted from a report by Emma McAleavey.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/22102014/australia-oil-consumption-1468/


 

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