PH Oil Demand Expected to Grow

According to a report done by Fitch Solutions Country Risk and Industry Research, the demand in the country for oil would grow at an average of 3.4% from 2022 to 2031.

“Net imports are anticipated to grow at around 3.5%, more or less closely in line with demand growth,”  mentioned the report.

It added that imports of oil are predicted to reach 78% of total fuel consumption this 2023 despite the already strong recovery in oil demand in 2021.

Fitch Solutions has said the Philippines’ “relatively small oil market” had already dampened growth, demand, and industry profitability.

“The Philippines’ demand for oil products has not been growing fast in spite of a growing economy and population,” mentioned the report. “Oil product demand stayed relatively at around 450,000 barrels per day (bpd) for the past years, growing by an annual average rate of 3.3% between 2010 and 2021.”

The growth of oil demand has been hampered by the increasing use of biofuels as well as the higher ratio of motorbikes compared to cars.

The report cites that with several players part of the oil trade and distribution, the Philippine oil market is deemed to be overcrowded.

According to the Department of Energy (DOE)’s data, there were 157 bulk distributors and 167 fuel importers at the end of 2021. “Refiners faced increased competition from industry players in wholesale and retail markets where they are free to set oil product prices and sales of smuggled fuels is rampant.”

Aside from this, Fitch Solutions noted the fragmented oil market in the Philippines, with more wholesale, retail players, and importers.

“Companies like Phoenix, Unioil, Insular, and Seaoil are gaining market shares, far outpacing legacy players like Chevron,”

Source: Business World