Sharp Drop in Gasoline and Diesel Consumption in January... Even Greater Concerns for February Due to COVID-19 Impact

Gasoline consumption down 16% YoY... Diesel down 23%
Consumption lower than the average of the past 5 years (2015-2019)

[Asia Economy Reporter Hwang Yoon-joo] In January of this year, domestic consumption of gasoline and diesel recorded double-digit declines. This is the result of being hampered by the novel coronavirus infection (COVID-19), and it is estimated that consumption sharply decreased from February, when domestic cases surged. On top of the already severely worsened performance due to last year's industry downturn, the unexpected adverse factor of COVID-19 has overlapped, raising concerns in the refining industry that restructuring movements could spread throughout the entire sector.

According to the Korea National Oil Corporation on the 2nd, gasoline consumption in January this year was 6.15 million barrels, down 16.02% compared to the same period last year. Diesel was 11.77 million barrels, down 23.52%. This contrasts with January last year, when gasoline (7.32 million barrels) and diesel (15.39 million barrels) consumption increased by 12.57% each compared to 2018.

In particular, this year's gasoline consumption was 5.3% lower than the average consumption over the past five years (2015?2019) of 6.5 million barrels, and diesel was also down 12.0% compared to the same period's average (13.39 million barrels). In 2017, due to economic contraction, gasoline and diesel consumption decreased by 6.9% and 8.9%, respectively, but the decline was in single digits.

More than 90% of domestic gasoline consumption is used as automobile fuel, and over 70% of diesel is used as fuel for freight trucks, buses, and the like. When freight truck operation decreases, diesel consumption also declines.

The refining industry cites the biggest reasons for the decrease in gasoline and diesel consumption in January this year as consumption contraction caused by COVID-19 originating in China and a reduction in operating days due to the Lunar New Year holiday. The problem lies in February. As the spread of COVID-19 intensified, the floating population sharply decreased and companies increased remote work, so the decline in petroleum product consumption is expected to be even greater.

An official from the refining industry said, "The period when the floating population decreased and remote work was fully implemented was February, as the COVID-19 situation spread," adding, "February statistics could show a much larger drop in consumption compared to January."

This content was produced with the assistance of AI translation services.