Improved fuel efficiency bigger threat to gasoline demand than EVs

Energy consultant FGE says improved fuel efficiency more so than electric vehicles will cause gasoline to hit its peak demand. Tofino Co-Op photo.

From 2016-2040, fuel efficiency gains will cut 11.3 million b/d from global gasoline consumption

Improved fuel efficiency in internal combustion engine vehicles will have a bigger impact on gasoline demand than electric cars, according to energy consultant FGE.

In a report by Reuters, Cuneyt Kazokoglu, head of oil demand at FGE said despite pledges made by European and Asian governments to shift away from fossil-fuelled vehicles, fuel efficiency in vehicle fleets across the globe is a bigger threat to gasoline demand, for now.

Speaking of “peak” gasoline demand, Kazokoglu said “It will come, but it will come because of fuel economy, not electrification.”

The company forecasts that between 2016 and 2040, gains in fuel economy will cut 11.3 million barrels per day (b/d) of gasoline consumption. That is more than double the 5.3 million b/d cut by the addition of hybrid cars, plug-in hybrids and EVs.

Kazokoglu added that the shift is concentrated on the gasoline market as there is no alternative use for the fuel, apart from light vehicles, mostly passenger cars.

As a share of the global passenger fleet, diesel cars are expected to fall significantly, from 15 per cent to about 8 per cent by 2030, but demand for distillates in air travel, heavy goods transport and shipping will buoy distillates consumption.

Kazokoglu expects gasoline demand to hit its peak more quickly, adding “it will inevitably peak in 15 years or so.”