Asian gasoline margins turn positive as demand rebounds

Asia-Pacific gasoline refining margins have turned positive for the first time in over two months, as the removal of some Covid-19 travel restrictions leads to an increase in regional driving activity.

The Argus fob Singapore 92R gasoline price was assessed at an 11¢/bl premium to Ice Brent crude today. This is the first such premium since 13 March, when margins were at $2.78/bl. An unprecedented slump in demand since then sent margins as low as -$13.86/bl on 13 April, as governments imposed strict curbs on travel because of the Covid-19 pandemic.

Demand for gasoline is picking up as countries start to lift the restrictions. Driving activity in Vietnam, Australia and New Zealand — all countries that have had some success in containing the coronavirus outbreak — rose in first-half May, according to mobility data from Apple that gives an indication of driving activity by tracking direction requests.

Vietnam's PVOil and Petrolimex are seeking to import more than 1mn bl of gasoline as the country starts to reopen its economy, boosting vehicle use and supporting fuel demand. Driving in Vietnam was 2pc higher than a 13 January baseline on 17 May, after staying around 20-60pc below the same baseline for most of April, according to the Apple data.

India's gasoline demand has also increased this month. Oil product demand in the country will reach 80pc of usual levels by the end of May from around 60pc last week, oil minister Dharmendra Pradhan said. Gasoline demand fell by 48pc against a year earlier in the first half of May compared with a 60pc fall in April. India has extended its lockdown, which started on 25 March, by two weeks to 31 May but is allowing factories, businesses and offices to reopen in an attempt to revive economic activity.

By Aldric Chew