Demand for petroleum products seen to grow 3% this year

The local demand for petroleum products is seen to increase slightly by three percent this year, Petroleum Institute of the Philippines (PIP) executive director Reynaldo Marquez said. Last year the growth in demand was recorded at two percent.

In an interview, Marquez said there will be a slight increase in demand for liquefied petroleum gas (LPG), diesel and gasoline products.

Marquez, however, did not give any figures. "This is just an estimate. The growth will mostly come from households since the economy is basically down," he said.

He noted that there are a lot of lay-offs and closing down of shops this year that caused the lowering of the demand for petroleum.

But, the PIP official said the oil industry is still optimistic that the economy will rebound in the latter part of the year. "The (oil) industry would like to see the industrial sector to be active in using petroleum products such as LPG," he said.

So far, he said the "saving grace" of the oil industry is the residential sector which continues to use the socially-sensitive LPG products.

Marquez, on the other hand, also expressed concern that the impact of the Malampaya natural gas project’s entry into the downstream oil industry will greatly affect the petroleum demand. "If Malampaya would attain its goal to fuel some power plants and to penetrate the transport industry and the residential sector, then we could expect a projected 20 percent decline in the overall demand for petroleum products," he said.

He said the Malampaya natural gas project would particularly affect the sales of fuel products.

Oil companies, for their part, have anticipated such impact from Malampaya project. Petron Corp., for instance, said it will be exporting some of its fuel products to nearby countries if Malampaya starts to affect their domestic fuel business.

The Malampaya Deep Water to Gas project, which went on full stream early this year, is the single biggest investment in the oil industry today.

It now supplies gas to three power plants in Batangas namely: Sta. Rita (1,000 MW); San Lorenzo (500 MW) and Ilijan (1,200 MW).