Data from Korea National Oil Corporation showed that domestic fuel consumption was up 11.7% year-on-year to 78.19 million barrels in October. Meanwhile, demand for the first ten months of the year increased 5.6% year-on-year to 770.89 million barrels. KNOC data points out that gasoline and jet fuel led the increase in South Korea’s fuel consumption last month. Gasoline demand rose by 1.4% year-on-year to 6.72 million barrels in October. Meanwhile, jet fuel use climbed 13.1% to 1.99 million barrels over the same period.
The government’s decision to gradually lift coronavirus restrictions is expected to support fuel demand in November. Seoul has also cut taxes on motor fuels by up to 20% for six months starting this month. Tax made up 50% and 40% of gasoline and diesel retail prices in South Korea, respectively. However, South Korean refiners such as SK Innovation, S-Oil, and Hyundai Oilbank are worried that a new COVID-19 variant first detected in southern Africa could prompt new lockdowns, which would dampen fuel demand again.
An industry survey showed that South Korea’s refinery run rates averaged around 81% in January-October. Market sources expect throughput to improve to an average of more than 85% in the fourth quarter. However, it could retreat to below 80% if South Korea and other countries reimposed restrictions due to the new coronavirus strain, the sources noted.
