Eppo: Energy contraction set to persist

Eppo: Energy contraction set to persist

Low demand for oil, LPG and electricity

Thai energy consumption in 2020 contracted by 5.8% from lockdown measures imposed to combat the pandemic and demand is expected to remain low with a 0.2-1.9% contraction this year, according to the Energy Policy and Planning Office (Eppo).

Eppo chief Wattanapong Kurovat said on Tuesday consumption of oil, gas and electricity were all in the negative territory last year.

Refined oil consumption contracted by 11.5%, with diesel contracting by 2.6%, gasoline and gasohol contracting by 1.2%, natural gas contracting by 8.2% and jet fuel plummeting by 61%.

Mr Wattanapong said liquefied petroleum gas (LPG) for transport, petrochemical business, other industries and cooking gas also contracted by 26.3%, 17.7%, 8% and 4.5%, respectively in 2020.

Electricity consumption contracted by 2.9%, with a huge drop seen in tourism, hotels, shopping malls and restaurants.

The drop in energy consumption came about amid a reduction in carbon emissions by 11%, or 222.8 million tonnes, last year.

Two segments saw some growth in energy businesses last year. Coal consumption grew 0.2% due to rising demand from the industrial sector while renewable power generation also grew by 7.1% due partly to electricity supplied from three new hydroelectric power plants in Laos.

Eppo expected low energy consumption will continue this year as average Dubai oil prices will swing from US$41-51 per barrel and the baht will stand at around 30.30-31.30 baht against the US dollar.

The estimated 0.2-1.9% contraction in energy demand is based on the domestic outbreak, said Mr Wattanapong.

If there is only one outbreak in 2021, energy consumption will contract by 0.2% but if a string of outbreaks follow later this year, consumption will further decrease resulting in a 1.9% contraction, he said.

The huge decline in jet fuel demand will continue to make overall oil consumption contract by 1.9-2.9% this year, according to Eppo.

Jet fuel consumption is expected to stand in the negative zone again, with a 45-51% contraction as a result of crippled tourism and international air travel.

Diesel consumption will grow by 0.8-1.3%, while gasoline and gasohol consumption will grow by between 0.3-0.8%.

Demand for LPG, excluding the petrochemicals sector, is expected to contract by 0.7-2.7%, with consumption of cooking gas growing by 1.1-2.5%, other industries growing by 1.2-3.6% and transport continuing to see growth below zero at 12.2-15.8%.

Demand for natural gas and coal will grow in the same range of 0.1-4.1%.

Renewable energy is expected to grow 5%, thanks to the state policy to support new renewable energy development projects.

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