Crude oil processing by Chinese refineries rose 10.8% on year to 39.60 million tonnes in June, while petroleum products inventories as of end-June increased 2.1% from a month ago to 29.75 million tonnes. The inventory level also rose from a year earlier for the first time since January.
Because credibility against Chinese statistics is not enough and some official data like inventory figures are not announced, it is difficult to grasp actual petroleum consumption in the country.
The following chart shows the estimated combined monthly consumption of gasoline, kerosene and diesel. The figures are calculated by production data released by the National Bureau of Statistics with customs data and estimated inventories based on Xinhua News data.
The three products are account for about 60% of total petroleum products output in China, according to the International Energy Agency. Therefore, chart's proportion of crude oil processing and the three products outputs seem to be roughly correct.
According to the chart, consumption of combined products is in relatively steady upward tendency compared to fluctuating crude oil processing.
Especially, gasoline output shows quite stable increase in the monthly data released by statistics bureau as well. However, growth of diesel production, that is the biggest among three products, is slowing down since 2010.
On the other hand, monthly outputs of other petroleum products that include naphtha or fuel oil etc. are almost capped at around 500,000 tonnes per day since 2010, except for surprising surge during October 2012 and February 2013. Except for gasoline, growth of industrial petroleum products demand in China seems to be slowing apparently.
Recently, Chinese government has ordered to domestic 19 industries to discard old inefficient excess production facilities by the end of September this year.
Since many of these facilities already have been idling due to the over capacity, the disposal of facilities is unlikely to reduce fuel consumption significantly. But the policy proves the sluggish growth of fuel demand over the past couple of years caused by large excess production capacity in the Chinese industrial sector.