Domestic fuel consumption to slow as construction, transport demand wanes

Weak transport and shipping sectors will compound the problem.

Singapore’s fuel consumption will see slow growth over the next decade as demand from the construction and transport sectors ease, according to a report by BMI Research.

“The subdued growth in Singapore's refined fuels consumption over the next decade will be driven by the slowdown in the country's construction sector, which will limit industrial demand for diesel. Additionally, we anticipate gasoline demand from the transport sector to remain soft over the coming years. This will be a result of the rising cost of car ownership in the country, which will keep a lid on fleet size growth,” said the report.

Fuel consumption growth will total to just 4.3% over the next ten years, the report said. Apart from domestic weakness, lower global trade activity at Singapore’s ports will also curb demand growth from the shipping sector.

“We expect lower trade activity and the slowdown in maritime traffic emanating from the sustained weakness in the Chinese economy, to moderate demand growth for the fuel over the coming years, keeping consumption largely stagnant at around the 913,000b/d mark through to 2024,” BMI Research noted.