Anwar Gasim, a researcher in the Climate and Environment Program at the King Abdullah Petroleum Studies and Research Center (KAPSARC); revealed that the demand for kerosene decreased by 46% and gasoline by 24% in March 2020; compared with the same month in 2019. This is due to the COVID-19 restriction measures that Saudi Arabia had taken in that month.
He explained that the demand for liquefied petroleum gas (LPG); diesel; fuel oil; and other oil products did not change during that period. LPG is used in the residential sector and in bakeries as cooking gas, and in the petrochemical sector as feedstock.
The researcher indicated that the demand for fuel oil, which is used in power generation, thermal desalination, industrial manufacturing, and international shipping, had increased by 20% in April 2020 compared with the same month in 2019, due to the increased consumption of producers, such as the Saline Water Conversion Corporation (SWCC), and independent water and power producers (IWPPs).
The demand for other oil products increased by 19% in April 2020 compared with the same month in 2019, despite the increased precautions to fight the pandemic in April 2020. Gasoline witnessed a decrease by 57% and kerosene by 88% compared with the same month in 2019.
The researcher’s analysis showed that the decision to resume domestic flights in June 2020 had led to an increase in the demand for kerosene in that month to 1.0 million barrel (MMb) compared with 0.7 MMb in May and only 0.4 MMb in April 2020.
Total Demand for Oil Products
He revealed that the total demand for oil products was 172.8 MMb in Q2 2020 comparing to 196.6 MMb in Q2 2019, due to the COVID-19 restriction measures.
In a recent report, KAPSARC assessed the COVID-19 pandemic’s effects on six key categories of secondary oil products, which include LPG, gasoline, kerosene, diesel, fuel oil, and other petroleum products, during the past year in Saudi Arabia.
The Center aimed to study the pandemic’s impact on various economic aspects. Last year, it published more than 15 Instant Insights to highlight the implications of COVID-19 at the local and global levels.
This commentary seeks to examine the impact of the measures; taken by Saudi Arabia to limit the spread of the virus on the rates of the demand for oil products. Besides, how they contributed to reduce the demand for gasoline and kerosene; at a time when the demand for fuel oil increased due to its use in power generation and water desalination.