California Gasoline Demand May Drop 9% by 2020

If vehicle standards are strictly enforced, the decline could be as much as 13%.

March 20, 2014

NEW YORK – With California residents switching to greener cars and state and federal policies boosting fuel efficiency, California may reduce its gasoline use by at least nine percent by 2020, Bloomberg reports.

Bloomberg New Energy Finance predicted transport fuel use in California will drop by roughly 1 billion gallons to 11.2 billion gallons in 2020, from 12.3 billion gallons in 2013. If vehicle standards are enforced, the drop could reach 13%.

The reduced demand is expected to sap demand from oil refiners in the state, including Exxon Mobil Corp., Valero Energy Corp., and Tesoro Corp.

“California will experience a significant shift in the make-up of both transport fuel demand and the composition of the vehicle fleet,” said Salim Morsy, advanced transportation analyst at BNEF, a London-based research group. “A drop in net fossil fuel demand may put pressure on California oil refiners’ margins in the coming seven years.”

Since 2002, fuel demand in California has already dropped more than 3 billion gallons a year, BNEF said.

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