UK gasoline decline starts to level out: UKPIA

OREANDA-NEWS. June 09, 2016. The decline in UK gasoline sales has started to slow, according to the UK Petroleum Industry Association (UKPIA).

Gasoline sales stood at 285,000 b/d in 2015, having fallen steadily from a 570,000 b/d peak in 1990. Gasoline sales declined at an average of 5pc/yr during the 2008-09 recession, but this rate has since slowed.

While the UK's gasoline demand has fallen, its appetite for diesel has grown steadily. Government tax incentives, engine improvements and strong growth in freight transport have pushed up sales to a new high of 483,000 b/d in 2015. The UK's refineries are incapable of producing enough diesel to meet demand, and the country regularly imports cargoes from the US, the Middle East, Russia and India.

The UK's fuel oil market is in long-term decline, with natural gas replacing it in power generation and gasoil now used for heating. UK fuel oil production has fallen in recent years, to 90,000 b/d in 2015 according to UK government data, but this still far exceeds demand and the majority of the UK's fuel oil is exported.

UK road travel demand is increasing, with the number of vehicle-kilometres travelled likely to rise by over 50pc from 1995 levels by 2035. Advances in engine efficiencies mean this trend is unlikely to be directly reflected in oil product demand, but the UK government expects over 90pc of transport requirements to still be met by oil products by 2035.