California may cut gasoline demand by at least 9 percent through 2020 as consumers switch to greener cars and state and federal policies boost efficiency.
Transport fuel use in the most populous state will drop by about 1 billion gallons to 11.2 billion gallons in 2020 from 12.3 billion gallons in 2013, Bloomberg New Energy Finance said in an e-mailed statement. If vehicle standards are strictly enforced, the decline could be as much as 13 percent, it said.
State and federal regulations covering the fuel efficiency of cars and the blending of biofuels with gasoline will drive the decline in gasoline consumption, according to BNEF, a London-based research group. That drop may 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,” Salim Morsy, advanced transportation analyst at BNEF, said in the statement. “A drop in net fossil fuel demand may put pressure on California oil refiners’ margins in the coming seven years.”
Fuel demand in California has already dropped by more than 3 billion gallons a year since 2002 as consumers drove fewer miles and purchased more efficient vehicles, BNEF said.
© Copyright 2022 Bloomberg News. All rights reserved.