new delhi beijing’s plans for electric cars threaten to cut gasoline demand
Last Updated : GMT 06:49:16
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

New Delhi, Beijing’s plans for electric cars threaten to cut gasoline demand

Arab Today, arab today

Arab Today, arab today New Delhi, Beijing’s plans for electric cars threaten to cut gasoline demand

Pawan Goenka president of Mahindra's automotive and farm equipment sectors
Singapore/Kuala Lampur - Arab Today

Demand for gasoline in Asia may peak much earlier than expected as millions of people in China and India buy electric vehicles over the next decade, threatening wrenching change for the oil industry, oil and auto company executives warned.
They said refiners should prepare for a future in which gasoline, their biggest source of revenue, will be much less of a cash cow.
Change is being prompted by policy moves in India and China, where governments are trying to rein in rampant pollution, cut oil imports and compete for a slice of the fast-growing green car market.
In its “roadmap,” released in April, China said it wants alternative fuel vehicles to account for at least one-fifth of the 35 million annual vehicle sales projected by 2025.
India is considering even more radical action, with an influential government think-tank drafting plans in support of electrifying all vehicles in the country by 2032, according to government and industry sources interviewed by Reuters late last week.
“We will see a clear shift to electric cars. It is driven by legislation so electric cars are coming, it is not a niche anymore,” Wilco Stark, vice president for strategy and product planning at German car maker Daimler, told Reuters.
Stark and other executives were interviewed during the Asia Oil & Gas Conference in Kuala Lumpur this week.
Daimler sees electric vehicles contributing 15-20 percent of its overall sales by 2025 and at least an additional 10 percent of sales coming from hybrids, he said.
Electric cars currently make up less than 2 percent of the global car fleet and any faster-than-expected growth in that percentage will materially impact oil demand and the refining business.
“Technology is moving fast. In 10-15 years... our gasoline market might not be the same as it is today,” said Dawood Nassif, board director at the state-owned oil company Bahrain Petroleum Company (BAPCO).
With gasoline responsible for up to 45 percent of refinery output and one of the highest profit-margin fuels, a slowdown or fall in demand will have far-reaching implications.
Credit agency Moody’s says that the fast pace of technological development makes accurate predictions difficult, but warned that direct financial effects from falling oil demand, including gasoline, “could be material by the 2020s.”
The changes are so big that the influential International Energy Agency (IEA) plans to revisit its analysis of electric vehicle trends and oil demand.
“The choices made by China and India are obviously most relevant for the possible future peak in passenger car oil demand,” an IEA spokesman told Reuters.
In its current policies scenario, last updated in November 2016, the IEA still expects oil demand from vehicle use to rise until 2040.
It is not just China and India that are changing fast.
Asia’s major carmakers, Japan and South Korea, already sell significant volumes of hybrid vehicles — which operate off gasoline and electricity — while fuel efficiency gains will continue to cut gasoline consumption for standard vehicles.
There will, though, be some major hurdles before a country like India goes mostly electric. High battery costs would push up car prices and a lack of charging stations and other infrastructure in India means carmakers may hesitate to make the necessary investment in the technology.
Asia has long been the main driver of future oil demand thanks to supercharged growth in sales of autos.
China sells more than 2 million new cars a month and is challenging the US as the world’s biggest oil consumer. India now is the world’s third-biggest oil importer, ahead of Japan.
More than a third of the world’s refineries are in Asia, up from just 18 percent in 1990. For refiners, the growth of vehicles that run on electricity and other alternative fuels is a wake-up call. They can tweak the products they make from crude oil to an extent, but still mostly rely on gasoline consumption for revenue.
“Rising pressure on margins and cash flows will potentially lead to stranded assets,” Moody’s warned, using a term for assets that no longer provide an economic return because of changes in the market or regulatory environment. The oil industry is taking note. Royal Dutch Shell said this week that it “is looking into ... the potential to introduce electric vehicle charging points at our retail sites in several countries.”
Oil executives say it is still premature to expect overall oil demand to fall soon. “Our industry will not disappear,” said Abdulaziz Al-Judaimi, senior vice president for downstream at Saudi Aramco, the world’s biggest oil company.
They are envisaging a shift toward producing more petrochemicals like plastics or household chemicals, areas where consumption is soaring.
Saudi Aramco is jointly developing the huge Malaysian RAPID refinery and petrochemical complex with state-owned Petronas and the two said this week they are exploring an expansion of its petrochemical capacity.
Exxon Mobil this week said it would buy a petrochemical plant in Singapore.
Refiners also still see strong oil demand from heavy industry.
“Refiners may shift their focus from gasoline to middle distillates,” said KY Lin of Taiwan’s Formosa Petrochemical, a major Asian refiner. “Gasoil is used widely, including in farming/industrial equipment... and also as a marine fuel.”

Source: Arab News

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

new delhi beijing’s plans for electric cars threaten to cut gasoline demand new delhi beijing’s plans for electric cars threaten to cut gasoline demand

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

new delhi beijing’s plans for electric cars threaten to cut gasoline demand new delhi beijing’s plans for electric cars threaten to cut gasoline demand

 



GMT 16:16 2014 Wednesday ,10 September

Samirah Ibrahim receives Saudi cultural attaché

GMT 09:32 2017 Sunday ,24 September

China confirms will limit oil exports to North Korea

GMT 19:56 2016 Saturday ,17 September

Typhoon Meranti death toll rises to 28

GMT 09:40 2018 Monday ,01 January

OIC Summit opens in Kazakhstan

GMT 06:37 2015 Monday ,07 December

Iran film directors protest colleague's jail term

GMT 18:37 2017 Friday ,25 August

Mental health issues should be prioritized

GMT 04:39 2017 Thursday ,31 August

Trump vows to right 'self-destructive' tax code

GMT 05:29 2017 Tuesday ,22 August

Celebrations across India on 71st Independence Day

GMT 10:54 2017 Wednesday ,11 October

Child obesity grows tenfold since 1975

GMT 02:31 2016 Tuesday ,06 December

Dubai Women Establishment delegation participates

GMT 04:29 2018 Wednesday ,19 September

North and South Korea: Kim and Moon hail new future

GMT 14:18 2013 Monday ,19 August

Newlywed Lebanese couple pose at car bomb site

GMT 11:11 2011 Friday ,12 August

Palestinian university ranks seventh in Arab world

GMT 15:16 2015 Wednesday ,26 August

UAE ambassador attends charity ceremony in Qalubiya

GMT 16:59 2016 Tuesday ,26 July

Hedge funds in new cycle of oil short-selling
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday