China fuel demand will plateau

BEIJING, Apr 25 (Business Times): China's demand for its three main refined fuels-diesel, petrol and kerosene-will plateau at first-quarter levels for the rest of 2011, China's National Energy Administration (NEA) said. It predicted that year-on-year growth in demand for the fuels would slow from 13 per cent in the first quarter to 9 per cent in the first half of the year, and 8 per cent in 2011 as a whole. But those growth rates mask a very stable absolute volume. The amount of fuel consumed is expected to barely budge: from 65 million tonnes in the first quarter, it will flatline to 130 million tonnes in the first half and inch higher to reach 265 million tonnes for the full year. It did not give a breakdown of the three fuels, but said that petrol consumption would pick up as more car buyers hit the road in China's second- and third-tier cities. 'Demand for cars is expected to be close to 20 million vehicles in 2011, 11 per cent more than last year,' the NEA said in a statement issued last Friday. 'There are already more than 90 million civilian-owned vehicles; and once the weather gets warmer more people will be driving, petrol demand will keep growing quite quickly.' Energy analysts are watching to see if soaring crude oil prices could erode demand for oil around the world. China is thought to be more insulated from oil prices than many countries because most energy-using sectors get state support, and the state controls fuel prices.