EU-15 Gasoline & Distillate Demand
Notes:
- The European refining system is not well matched to its demand slate. Unlike the United States, Europe produces more gasoline than it can use, which benefits the United States, and it imports distillate.
- As this slide shows, distillate demand in Europe exceeds gasoline demand – the reverse of the situation in the United States. Furthermore, gasoline demand has been flat to declining since at least the mid 1990’s, while distillate demand has been increasing, worsening the match between local refining and demand.
- Distillate includes both diesel and heating oil. As in the U.S., distillate demand has been growing as a result of diesel demand growth. Heating oil has been stagnant and is expected to decline.
- Europe has always had more diesel usage than in the United States, but an aggressive tax incentive program to encourage consumers to switch to diesel vehicles has contributed to the lack of growth in gasoline.
- Will the trend towards relatively more diesel continue? When might Europe reach saturation and an equilibrium balance?
- This changing slate of diesel and gasoline consumption has implications for refiners If the European demand trends shown above are going to continue, might refineries begin to reconfigure to better match the European demand slate while they are investing to meet changing product specifications, thereby reducing the amount of excess gasoline available for export?