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Asian fuel supply to outpace demand by 2018

November 18, 2013
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As the largest refineries in China and India continue to keep supply well ahead of demand for fuel across Asian markets, many refineries will have to work at a reduced capacity over the next five years, and operate at very weak margins, according to Malaysian newspaper The Star Online.

In fact, China and India alone account for more than half of Asia's total refining capacity and a further capacity expansion of 2.5 million barrels per day is planned by the end of 2014. Meanwhile, Vietnam and Pakistan are also working hard to ramp up their fuel production and are planning to build plants over the next few years as a means to cut imports and boost their own economies.

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This rush to produce fuel, however, might leave the majority of Asian refineries churning out production to well-supplied and possibly even saturated Asian markets. Experts predict that demand is going to grow at a slower rate over the next few years, while the total Asian capacity is expected to reach 36 million barrels per day by 2018, up from the current 30 million.

A recent analysis of the market trends by Gaffney, Cline and Associates, Singapore, reveals that by 2018 there will be a surplus in production of three million barrels per day, stated Stuart Traver, technical director of the consultancy firm.

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