Fuel demand will remain almost flat over next 10 years

Source: By Paul Takahashi, Houston Chroncile • Posted: Wednesday, March 24, 2021

City of Houston electric vehicles sit ready for charging in a downtown parking garage in December 2013.
City of Houston electric vehicles sit ready for charging in a downtown parking garage in December 2013. City of Houston

Demand for gasoline and diesel will remain nearly steady in North America over the next 10 years, according to a new report.

Fuel demand is expected to increase by 3 percent in North America, while in Europe and Asia, demand could drop by 5 percent over this decade, according to GlobalData, a market research firm. The disparity is blamed on North America’s relatively sparse charging network, which has slowed adoption of electric vehicles.

“The fact that transition to non-fuel cars is supported by many governments, major car manufacturers and oil and gas companies helps to keep overall fuel demand relatively constant by the end of the decade,” Svetlana Doh, GlobalData’s upstream oil and gas analyst, said in the report.

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European oil majors Royal Dutch Shell, Total and BP are investing in electric vehicle charging networks to meet the growing demand. Shell, in particular, has an ambitious plan to increase the number of EV charging locations to almost a half-million by 2025.

The global electric vehicle and plug-in hybrid vehicle markets are expected to account for a fifth of new car sales by 2030 and nearly a quarter of new vehicle sales by 2035. In the U.S., about 16 percent of new vehicle sales are forecast to be alternative fuel vehicles by 2030, according to Global Data.

The shift from gasoline-powered cars to electric vehicles is spurred by government incentives and regulations over greenhouse gas emissions. The transportation sector accounts for almost a quarter of carbon dioxide emissions.

“In order to meet their own deadlines on carbon emissions, many countries have been in the process of developing policies favouring EV business over gas-powered cars by introducing incentives and tax reductions,” Doh said. “For example, in the US, car manufacturers can apply for loans (up to 30 percent) to revamp their factories for production of alternative fuel vehicles. Currently, Western and Central Europe, Japan, Korea and China are leading the transitioning to EVs.”