Diesel fuel keeps the world economy moving. From consumer goods moved across the globe, to the generation of electric power, to increased efficiency on farms, diesel fuel plays a vital role in strengthening the global economy and the standard of living. The diesel as fuel market is expected to grow at a CAGR of more than 1% during the forecast period 2020 - 2025. The growing demand for energy resulting from population growth and industrial developments is driving the diesel as fuel market. In addition, the increasing oil and gas E&P investments are likely to offer immense growth opportunities for the market. However, a rise in concerns related to carbon emissions and a shift towards electric vehicles and renewable sources of energy are likely to restrain the growth of the market.
- The transportation segment is expected to dominate the global diesel as a fuel market over the forecast period.
- Increasing the adoption of hybrid power systems is gaining prominence in the market. With the declining cost of solar PV systems, companies are adopting solar-diesel hybrid power systems, which in turn, is likely to provide an opportunity in the market.
- Asia-Pacific is expected to witness significant growth in the global diesel as fuel market during the forecast period.
Key Market Trends
Transportation Segment is to Expected to Dominate in the Market
- The transportation segment is expected to dominate in the market owing to a higher number of passenger vehicles, light trucks, and heavy trucks.
- Diesel is primarily used in the primary modes of urban mobility and transportation such as public transportation, private transportation, and freight transportation. The number of vehicles on the road is expected to increase with the growing urban population.
- Hence, the increased deployment of vehicles due to the rise in urbanization and industrialization will augment the consumption of diesel fuel.
- In 2019, the world diesel consumption has reached 27955 thousand barrels per day with a growth rate of 1.3% is likely to witness a significant growth of diesel as a fuel in the transportation segment across the globe.
- Most of the large trucks, buses, and tractors in the United States and around the world have diesel engines that use diesel fuel. Most of the diesel fuel used in diesel engines is refined from crude oil an the world crude oil production was 83182 thousand barrels per day in 2019.
- Sustained on by favourable excise taxes on diesel has led to a higher demand for diesel as a road fuel in the vast majority of European Union Member States. Moreover, non-OECD countries diesel consumption was 14743 thousand barrels per day with a annual growth rate of 3.3% in 2019 and thus, is expected to have positive effect on diesel fuels in transportation segment.
Asia-Pacific is Expected to Witness Significant Growth in the Market
- In Asia-Pacific, the rising number of automobiles and growing energy demand in developing countries has increased the need for crude oil and refined products such as diesel fuel. As per the IEA, the demand for oil is rising in countries such as China and India.
- About 44% of the market’s growth is likely to originate from this region during the forecast period. The region is witnessing a significant increase in the average consumer spending owing to stable economic development. This will subsequently drive the growth of industries such as automobile, thereby driving the consumption of diesel fuel in the region.
- China, India, Japan, and South Korea are the key markets for diesel fuel in the Asia-Pacific region. Market growth in this region is expected to be faster than the growth of the market in other regions.
- In 2019, the total Asia-Pacific diesel consumption has reached 9595 thousand barrels per day with a growth rate of 2.7% indicating a significant growth of diesel as a fuel across the region.
- The recovery of diesel consumption from the effect of COVID-19 that had affected the transportation and industrial segment is likely to be recovering gradually in the coming years, as economies come out of containment and activity levels rise.
The diesel as fuel market is fragmented. Some of the major players in the market include Chevron Corporation, Exxon Mobil Corporation, PetroChina Company Limited, Qatar Petroleum, and Royal Dutch Shell Plc.
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