Liquid fuels, a sector in growth and transformation

The greater economic dynamism, the return to in-person activities in cities, the preference for private vehicles after the pandemic, the increased traffic congestion, the growth of the vehicle fleet, the reactivation of tourism, and air transport were determining factors in the growth of liquid fuel consumption in Colombia in 2022; let us remember that it increased by 14% and reached 345 thousand barrels per day (KBD).

The expectation is that, even with a greater penetration of electric mobility (12% of annual vehicle sales), the share of conventional gasoline and diesel vehicles will continue to be high in 2032, around 90%. According to the ACP report ‘Liquid fuel market in Colombia in the context of energy transition’, liquid fuel consumption will continue to grow by around 2.5% annually in the next decade.

Chain agents expect that, when disaggregated, gasoline demand will increase by 3% in 2023 and 2% in the following years. In the case of diesel, the average annual growth would be 2% starting in 2023, and for jet fuel, 4%. These increases in consumption are related to the country's economic growth, the expected growth in air transport, the expectation of expansion of the vehicle fleet, and the increase in land freight transport; but slowed down due to the greater efficiency of vehicles and energy diversification.

Although the expected increase in fuel consumption for 2023 is lower than those observed in 2021 and 2022, these are demand growth rates similar to those before the pandemic. In this sense, there is an opportunity for the liquid fuel sector to continue expanding its capacity to meet the consumption needs of Colombians, contributing to the reduction of the carbon footprint of its operations and overcoming the challenges of sustainable mobility and energy transition.

In this transition process, the sector has made good progress initially with the national program for blending gasoline and diesel with ethanol and biodiesel, and more recently with the development of advanced biofuels and solar generation projects at supply plants and service stations, energy storage systems, installation of charging points for electric vehicles, vehicle gas stations, hydrogen research, voluntary biodiesel blending pilots, and additives to improve fuel quality to higher performance and lower emissions products, among other achievements. Among the energy transition actions in mobility, the opportunity to contribute in the short term to emission reductions stands out, without fiscal costs or additional investments, increasing the ethanol content of gasoline from 4% to 10%.

To meet all these consumption needs of Colombians, improve the reliability and quality of fuel supply service, and work on the challenges of energy transition in mobility, distribution chain agents have planned investments in the country this year amounting to 3.3 trillion pesos.

#CombustibleThatDrivesUs