China's Economic Shift Seen by IEA in Gasoline Demand Tea LeavesBloomberg News
Gasoline demand rises 10.4 percent in first 10 months of 2015
Car usage a ``wild card'' for demand growth next year
China’s gasoline demand growth exceeded expectations in the first 10 months of the year, underscoring the country’s shift away from heavy manufacturing, according to the International Energy Agency.
Gasoline demand from January to October increased 10.4 percent compared with the same period last year to about 230,000 barrels a day, the Paris-based agency said in its monthly Oil Market Report released Friday. This growth rate contrasted to weak diesel and fuel oil consumption, according to the energy adviser to developed nations.
The divergence from other fuels supports “the increasingly compelling argument that the Chinese economy is undergoing a structural transformation -- shifting from heavy manufacturing/exports towards a more domestically-focused economy,” the IEA said.
While gasoline demand growth this year has surpassed expectations, the pace is seen lagging the 400,000 barrel-a-day implied by China’s robust car sales. Idle or under-utilized vehicles “potentially stores up persistent strong gains in Chinese gasoline demand for many years to come,” the IEA said in its report.
Diesel demand, a barometer of the country’s industrial activity, is forecast to stay flat or fall in 2016, while gasoline consumption will rise by 200,000 barrels a day, according to the IEA. The difficulty in predicting vehicle usage is “a potential wild card for the 2016 Chinese demand forecasts,” it said.
— With assistance by Sarah Chen