Bid & Tender
Annual Demand for Fuel in Oman Projected at 10% Until 2030

Date : Sep 16, 2015

Oman's average annual demand for refined petroleum products is projected at 10 per cent for another 15 year time span, until 2030, according to an estimate by the state-owned refinery company.


The country's fuel (petrol, diesel and aviation fuel) demand will surge to a hefty 582,000 barrels per day (bpd) by the year 2030 from 124,000bpd in 2014 and an estimated 126,000bpd in 2015.


Of the estimated 126,000bpd demand this year, 65,000bpd is for petrol, 50,000bpd for diesel and 11,000bpd for aviation fuel, according to demand estimate of Oman Oil Refineries and Petroleum Industries Company (Orpic), which owns the country's Sohar and Mina Al Fahal refineries.


Driving the growth in demand for fuel is mainly petrol and diesel, which again depends on the growth in vehicle usage and overall business activities.


However, the fuel demand growth projection for the current year is marginal at 1.61 per cent to 126,000bpd, mainly due to a 2.61 per cent fall in new vehicle registration in the first half. The total number of vehicles registered till the end of June 2015 stood at 50,802 as compared to 68,700 for the same period in 2014, apparently due to a slowdown in economic activity. The recent plunge in oil prices caused a slowdown in investment as well as overall economic activity in the country.


However, demand for aviation fuel is expected to surge once the new airport with a passenger handling capacity of 12 million passengers per year starts operation, probably by the end of next year.


The compounded annual growth rate of fuel demand in the last nine years was 10.4 per cent from merely 56,000 bpd to 124,000 bpd in 2014.


Presently, Sohar and Mina Al Fahal refineries have a combined refining capacity of 222,000 bpd. Once Sohar Refinery's multi-billion-dollar improvement project goes on stream by the end of 2016, total crude oil processing capacity of the country will touch 314,000 bpd. The expansion will substantially increase production of liquefied petroleum gas (LPG), naptha, kerosene, gasoline, diesel and will reduce environmental emissions. The project will help Oman to reduce dependence on imported naphtha, while the product range will increase substantially. With Duqm refinery also taking concrete shape, crude oil processing capacity will jump once the third refinery starts operation.


Orpic is also developing a new distribution infrastructure, which is called a multiproduct pipeline, for 290-kms between Muscat and Sohar. It will not only meet local demand for refined petroleum products, but also reduce truck traffic by 70 per cent, which in turn will improve road safety and environment.


Also, transportation costs of tankers are projected to come down substantially once the new pipeline and world-class storage terminal facilities are in place. The whole facility will be commissioned by the second quarter of 2017.