UK diesel and gasoline demand edges closer to pre-Covid levels

London (Quantum Commodity Intelligence) - Pump sales of diesel and gasoline in Great Britain continued to edge higher last week to reach 92% of pre-Covid typical levels, data from the UK's Department of Business, Energy and Industrial Strategy shows Friday.

Filling stations in England, Scotland and Wales sold an average of 9,700 litres of diesel and 6,605 litres of gasoline a day over the week to May 2, up 137 and 93 litres respectively from a week earlier.

The recovery of ultra-low sulfur diesel was slightly better than gasoline, with the middle distillate achieving 93% of pre-Covid levels compared to 91% for the light end fuel.

The 16,310-litre daily average, combining diesel and gasoline, maintained the momentum in recovery since mid-April when lockdown measures started to ease.

Before the first strict lockdown on March 22, 2020, the average filling station in Great Britain sold 17,690 litres a day of road fuel.

Refining margins for diesel remain lacklustre, with the cracks for diesel barges loading in Rotterdam pegged around $5.25/b versus Brent Thursday.

The forward curve tracks the expected recovery in markets this year, with cracks for diesel barge swaps in December trading around $9.30/b, Quantum data shows.

But the growing popularity of electric and hybrid cars could leave demand struggling to reach pre-Covid-19 levels.

Battery electric cars will account for 8.9% of total new car registrations in the UK by the year-end according to the Society of Motor Manufacturers (SMMT).

Plug in hybrids, which only draw from the fuel tank when the battery runs out are expected to account for 6.3% of total new car sales by the year end.