Surging Gasoline Consumption, Demand From Petrochem, To Push Naphtha Consumption Past 960 MMT By 2026

Surging gasoline consumption, demand from petrochem to push naphtha consumption past 960 MMT by 2026

22-Feb-17

Surging gasoline consumption across the globe coupled with rising demand for naphtha based petrochemicals in developing countries to fuel global naphtha consumption through 2026 , as per TechSci Research Report. Global naphtha consumption is projected to cross 960 mln metric tons by 2026, on account of oversupply of naphtha, low prices of naphtha, and increasing demand for ethylene, propylene and aromatics petrochemical products. According to IEA, 11.5 million bpd of oil are used in petrochemicals production, of which around 90% (50% naphtha & 40% LPG) is used as a feedstock and remaining for thermal energy generation. Moreover, naphtha is primarily used for gasoline blending and increasing demand for gasoline is anticipated to fuel demand for naphtha across the globe. Naphtha is the best suitable blending component for gasoline, as it significantly improves octane number of the fuel. Gasoline blending dominated naphtha consumption in 2016. Rising demand for gasoline across the globe is anticipated to boost naphtha consumption for gasoline blending in the coming years. According to BP Statistical, global gasoline consumption stood at 95.01 mln bpd in 2015, registering an increase of 2% over the previous year.

Asia-Pacific dominated global naphtha consumption and the region is forecast to continue to be the largest consumer of naphtha across the globe through 2026. Developing countries such as China, India and Indonesia along with developed countries such as Japan and South Korea are heavily dependent on imported naphtha for use as feedstock in the petrochemical industry. Further, North America accounted for the second largest share in naphtha consumption across the globe, due to growing automobile market and rising demand for gasoline in the United States. On account of growing demand for gasoline in the United States, a large amount of naphtha would be consumed by refineries in the country to address the growing demand for gasoline.

"Apart from increasing gasoline demand in developed and developing countries across the globe, rising global demand for naphtha can also be attributed to surging demand for naphtha based petrochemicals such as aromatic petrochemical products (benzene, toluene and xylene), in developing countries. These aromatic products form building blocks for many products that are used in day to day life. Moreover, major demand for naphtha is being generated from Asia-Pacific and Middle East & Africa regions, owing to presence of numerous traditional naphtha based crackers in these regions. This is anticipated to boost naphtha consumption across the globe in the coming years", said Mr. Karan Chechi, Research Director with TechSci Research, a research based global management consulting firm.