A new report commissioned by the Fuels Institute with funding support from the NATSO Foundation projects that U.S. diesel demand will decline 12.5 percent to 3.5 million barrels per day (MMB/D) in 2030 from a near-term peak of about 4 million MMB/D in 2015.
Improved vehicle efficiencies coupled with the growing use of compressed natural gas for heavy-duty vehicles will curb diesel demand, despite a substantial increase in the number of diesel-powered light-duty vehicles in the market, according to the report, “An Assessment of the Diesel Fuel Market: Demand, Supply, Trade and Key Drivers.”
Global demand for diesel fuel, meanwhile, is expected to increase by more than 6 MMB/D from 2013 to 2030, driven by industrialization in emerging markets as well as by increased use of diesel in global shipping fuels.
In contributing to this report, the NATSO Foundation sought to identify changing market dynamics and future trends most likely to impact the truckstop and travel plaza industry.
“Changing consumer demand for diesel fuel will have a significant effect on fuel retailers and the U.S. economy,” said NATSO President and CEO Lisa Mullings. “This report will help truckstops and travel plazas to develop a sound strategy for optimizing these market changes to lead the fuel retailing industry into the future.”
The 32-page report, developed by the PIRA Energy Group, analyzes domestic diesel fuel demand, production capacity, international demand and trade balances, as well as the various programs and requirements that might affect overall diesel demand.
While diesel fuel is growing in popularity both domestically and internationally, its further demand will be strongly affected by both new fueling options, shifts in fuel usages and vehicle improved efficiencies.
Among the light-duty vehicle fleet, diesel demand is expected to more than triple – from less than 0.3 MMB/D to 1 MMB/D by 2030 -- as diesel vehicles gain market share. However, diesel fuel will face competition from new fueling options, especially electric vehicles, and further advances in engine efficiencies that will decrease overall fuel demand.
Competition from natural gas and expected increases in vehicle efficiency will cause diesel fuel demand for heavy-duty vehicles to decrease from nearly 2.6 MMB/D today to 1.8 MMB/D by 2030. Other sources of diesel demand also should decline in aggregate due to efficiency improvements and substitution.
The report is available for download at www.fuelsinstitute.org.
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