After liquid fuel consumption decreased by 20% in 2020, mainly due to the social isolation measures adopted to control the spread of Covid-19, a growth of 16% is projected for 2021 in the country, according to the latest economic report from the Colombian Petroleum Association (ACP).
- Fuel consumption decreased by 20% in 2020, mainly due to the measures adopted to mitigate Covid-19.
- For 2021, growths of 17% in gasoline consumption, 12% in diesel, and 50% in Jet are expected.
- In the medium term, an increasing demand for fuels is anticipated, although at a slower pace, and a market with greater competition among importers and distributors, and among energy sources.
According to the report Evolution and prospects 2020 – 2021 of the liquid fuels market in Colombia, for 2021, growths of 17% in gasoline consumption, 12% in diesel, and 50% in Jet are expected. With these expectations, gasoline would reach 100% of the 2019 demand level, and in diesel and Jet, recoveries of 93% and 62%, respectively, are expected.
The total restoration of diesel consumption could occur by 2022, and in the case of Jet, it could take until 2023, due to the high level of uncertainty about the effects of Covid-19 on consumption habits, such as business travel, recovery of tourism, increase in telecommuting, among others.
Within the projections for 2021, investments of 500 billion pesos by companies in the sector are also expected, of which 62% will be allocated to the improvement of service stations, 17% to expansions and maintenance of plants, 6% for energy transition projects (charging stations), 2% for socio-environmental management, and 13% in other activities (lubricants and complementary).
“We see the beginning of the recovery of demand and the trend for next year as something very positive, after the sharp decline caused by the pandemic. Fuel consumption is an indicator of economic recovery; in this sense, the outlook from 2021 is optimistic not only for the sector but for the country's reactivation,” said Francisco José Lloreda Mera, president of the ACP.
Regarding the medium-term outlook (2021-2030), the companies surveyed for the report (refiners, transporters, and wholesale distributors) foresee a sector marked by energy transition, the entry of new importers, and a reorganization in the distribution market, meaning greater competition and a change of players.
In this sense, the report projects that the demand for gasoline and diesel in the next decade will continue to increase, but at a slower pace (possibly at 2.1% annually vs. growth of 4.1% in recent years), mainly due to lower economic growth and also the influence that the penetration of electric mobility and other technologies may exert.
“The medium-term outlook indicates that fuel consumption will continue to grow, although probably not at the same pace. In this sense, the major challenges that chain agents will face will be to improve their profitability, openness to imports, value offerings to their customers, and improve the quality of fuels in an increasingly competitive market, not only among agents but also among energy sources,” explained Francisco José Lloreda Mera, president of the ACP.
Finally, in this new scenario, companies believe that the medium-term public policy for the fuel sector should be aimed at flexibilizing regulation, ensuring supply, facilitating third-party imports by gradually moving towards price liberalization, and improving quality and efficiency in service delivery.
[prefix_calltoaction title=»Economic report on the evolution and outlook for 2020 - 2021 of the liquid fuels market in Colombia» button_text=»Download» button_link=»https://acp.com.co/web2017/es/asustos/economicos/690-informe-economico-avances-y-perspectiva-para-la-exploracion-de-petroleo-y-gas-2020-2021"]Liquid fuel consumption in the country, after two consecutive years of growth at rates above 31%, decreased by 20.1% in 2020 mainly due to the social isolation measures adopted to control the spread of Covid-19[/prefix_calltoaction]
Colombian Association of Oil and Gas