China’s oil demand by 2020 will be over 2.8 mbpd higher from today’s level (12.5 mbpd in 2020 versus 9.8 mbpd in 2012).This steep increase will be primarily the result of a steep rise in oil demand for road transportation and to a lesser extent due to increased demand for the industrial, household and other sectors.

Car, truck and bus sales in China continue to soar and are expected to reach 20 million units this year. The US, the world’s traditionally largest auto-market, expects vehicle sales to reach 16 million units in 2014.

Given the huge size of the Chinese population and the low levels of car ownership today, it is evident that in the vehicle sector China will not reach saturation levels for years to come. The current rate of Chinese car ownership stands at 70 cars per 1,000 people and it is estimated that will take more than 20 years to reach 400 units per 1,000, a mark considered an upper level for the Chinese society.

The exponential growth of the car and truck fleet in China leads to significant increases in oil demand which will offset any gains in fuel efficiency of new vehicles. The market for trucks and buses will grow in line with economic activity and public transport planning and in any case at a much lower pace compared with the lighter-vehicle market.

Our forecast suggests that oil demand in the transportation sector by 2020 will reach 6.6 mbpd, whereas for all other sectors it will be 5.9 mbpd. This compares with 5.3 mbpd in the non-transport sector and 4.5 for transport in 2012.
Source: Centre for Global Energy Studies