Asian gasoline prices surged to a record premium against diesel as private cars and motorbikes are coming back to roads. At the same time, the use of buses, trucks, and trains remained low amid sluggish public transportation and industrial activity. This highlights the uneven fuel demand recovery after the coronavirus pandemic. Commuters are preferring private vehicles than public transportation to avoid COVID-19 infections.
In Singapore, the 92-RON gasoline’s front-month swap was at a $3.26/barrel premium against diesel on September 28, the highest since 2017. This is compared to a $25 discount in March. Indian state refiner BPCL is seeking gasoline cargoes on the spot market in a rare move to meet rising domestic requirements. On the other hand, demand for diesel remained flat, with a surge in exports from major Asian producers adding to the glut.
Oil market analysts expect Asia to remain net short of gasoline through the end of 2020. Run rates at China’s state-owned refineries fell to 76% of capacity in September, five percentage points lower than a year earlier. In India, refineries run at 76% in August, falling from 83% in July. In Singapore, stocks of light distillates, including motor fuel, slumped the most in 25 years last week. Contrastingly, inventories of middle distillates, including diesel and jet fuel, climbed to near a nine-year high.
