01 May 2020 | 11:28 UTC — London

UK transport fuel demand slips to multi-year lows in March as lockdown bites

Highlights

Jet fuel hardest hit with 15% year-on-year contraction

Road fuel demand down 2% on the year in March

UK lockdown began on March 23

London — Demand for key transport fuels in the UK fell to multi-years lows in March as sales in Europe's second biggest oil market began to slump due to travel restrictions to contain the spread of coronavirus.

Demand for jet fuel was the hardest hit by the lockdown measures, falling to 1.14 million mt in March, down 15% from year-ago levels and the lowest March level since 2002, according to official UK data submitted to the Joint Organizations Data Initiative (JODI).

The UK 's road fuel demand, which peaked in 2006, totaled 3.35 million mt in March, down 2% from year-ago levels and the lowest March level for gasoline and diesel demand since 2013, according to the data.

Combined, the data shows UK demand for the main transport fuels fell to 4.49 million mt in March, down 5.6% from year-ago levels and the lowest since January 2015.

Europe's second-biggest fuel market after Germany, the UK was officially put into lockdown on March 23. Market watchers expect April to see the most severe impact from the pandemic on oil markets with up to 30 million b/d of global demand destruction due to travel curbs and lockdowns.

Last week, government data showed transport use in the UK was down by around 60% or more for all transport types since February but showed an uptick in motor vehicle usage on April 20 to 41% of pre-lockdown levels.

Road transport accounts for more than half of oil demand in the UK with gasoline and diesel meeting around 98% of transport energy needs. Gasoline sales last year averaged 299,820 b/d and diesel sales averaged 546,770 b/d, according to Platts Analytics estimates.

Crude flows fall

Compared to February, the lastest UK data shows imports of crude fell by nearly one-third to 2.54 million mt in March with a corresponding 44% decrease in crude exports. Demand for crude remained relatively stable on the low levels seen in February, however, as refinery production fell only 2.2% around 4.25 million mt, the data shows. The UK's production of crude and NGLs slipped to 2.04 million mt, down from 2.11 million mt in February.