Global Diesel Fuel Industry Outlook

  • Global demand for liquid fuel in 2017 is estimated to at 98 Mbpd, which is expected to reach 100 Mbpd by 2019 (1.21 percent CAGR)
  • The Global product demand for Diesel during the same year 2017 is estimated to be 19.69 million barrels/day (Mbpd) and it is forecasted to reach ~27 Mbpd by 2020
  • The growth in demand for diesel will be moderate in North America and Europe but will increase drastically in APAC, accelerated mainly by the increase of commercial vehicles, especially in India and other South Asian Countriesdiesel-global-market-sizeGlobal Diesel Fuel Trends
  • Increasing concerns over carbon dioxide emissions and fuel efficiency has resulted in stricter regulation on fuels. Ability of the diesel fuel to reduce emissions as well as improve fuel efficiency is resulting in its higher demand
  • Developing nations higher demand for power and the inability of the existing infrastructure to reduce the demand – supply gap is resulting in the growth of diesel generators industry at ~5 – 6 percent
  • Improved economic growth and trade in the emerging and developing nations have resulted in significant growth of the commercial transportation sector. Share of diesel fuel in the transportation sector is expected to grow from 30 – 32percent in 2016 to 32 – 35 percent by 2025

Drivers and Constraints for Diesel Fuel 

Drivers 

Energy Efficiency 

  • Having high energy density per unit volume, diesel is preferred in the markets, such as commercial heavy duty vehicles, power generation, and in various other industrial applications for its high energy/thermal efficiency  

Heavy Transport Sector

  • Growing demand for heavy transport sector especially in the emerging economies like China, India, Brazil, and Indonesia drives the demand for diesel fuel

Taxation policies 

  • Taxes imposed by most of the nations are less for diesel compare to gasoline. Hence, diesel consumers enjoy a price advantage. However in the US, federal and local taxes on diesel are slightly higher than gasoline

Constraints

Environmental Policies 

  • Stringent emission standards on diesel lowering sulfur emissions. By imposing “Clean Air Zones”, Governments around the world have put some restrictions to drive diesel vehicles

Alternative Fuel Vehicles

  • Increasing usage of alternative fuel vehicles, such as Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) vehicles could hamper the diesel fuel market though the penetration level is low. Countries like the US and China are creating dense network of natural gas refueling stations

Supplier Maturity 

  • Diesel fuel suppliers are highly matured in North America and Europe, with intensive competition among the top global suppliers (ExxonMobil, BP, Shell) as there are no significant state owned oil companies in these region
  • In the APAC and Middle East, though there is a significant presence of private suppliers, the diesel fuel market is dominated by the state owned
  • National Oil Companies (NOCs). In Africa and LATAM, the presence of private suppliers is significantly low and the market is dominated by NOCs