Recovery in fuel consumption is an indicator of the start of economic reactivation: ACP

The Colombian Petroleum Association (ACP) presented the economic report “Impacts of Covid-19 on the liquid fuels market and recovery prospects 2020,” where it is evident that after a strong impact on the sector in April, fuel consumption began to recover in May, due to the reopening of various economic sectors in the country.

• After hitting rock bottom in April with a drop of 60%, fuel demand began its recovery.
• In May, an increase in gasoline and diesel-biodiesel consumption of 40% was recorded.
• The reactivation of productive sectors will drive the recovery of fuel demand for the rest of the year.

The mandatory isolation measures adopted to contain the emergency restricted the movement of the population and economic activity, affecting the energy demand of all sectors, especially transportation, which led to a drop in liquid fuel demand of 60% in April. According to the report, the strongest decrease was recorded in aviation fuel demand (Jet A1) with a drop of 90%, as a consequence of border closures and restrictions on domestic flights, which led to the shutdown of commercial aviation; this was followed by a reduction of up to 70% in gasoline consumption, and 50% in diesel-biodiesel blends.

After the strong impact recorded in the first month of isolation, the report indicates that starting in May, consumption began to recover and the demand for gasoline and diesel-biodiesel increased by 40% that month, due to the reopening of some manufacturing and trade activities, mainly.

“The fuel sector represents 1% of the national GDP and is what drives Colombia, supplying the fuels needed for the movement of people, transportation of goods, the operation of industries, agriculture, among others; that is why we view these recorded recovery signals and the forecasts for the remainder of the year with optimism, as it is also a sign that our economy is taking steps towards its reactivation,” said Francisco José Lloreda Mera, Executive President of the ACP.

According to the report, in the case of gasoline, it is expected that by the end of the year it could reach a consumption similar to that recorded in 2019. For its part, diesel-biodiesel blends would be at levels close to the previous year, subject to economic reactivation; and finally, in Jet fuel, the projection is a recovery of consumption starting in July, although not to the same levels as in 2019, as restrictions on domestic and international flights are lifted.

“Although we will not grow in consumption, and we may not return in the short term to the levels recorded before the pandemic, fuel demand is a good sign of economic dynamics, so we hope that as more productive sectors are reactivated, it continues to recover. This sector, like other areas of our economy, expects to continue contributing to the country in the current situation and in a post-Covid scenario,” emphasized the union leader.