Southeast Asia Recovers Amid Inflation Concerns

Gasoline:

Estimated at 1.4 million b/d in 2019, gasoline demand for Indonesia, Malaysia, Philippines, Thailand, Vietnam and Singapore combined represents roughly one fifth of the total Asian demand. According to ESAI mobility index, average mobility in these countries have surpassed pre-pandemic levels in May, as the orange line in the left chart shows. This is driven by strong rebound of road traffic in Indonesia as the population returned to celebrate Ramadan and Eid al-Fitr after two years of COVID restrictions. Travel during these holidays also led to heavy traffic on highways and major roads in Malaysia.

In Philippines, congestion is back as businesses and public transport have been reopened to operate at full capacity since early this year. Therefore, ESAI Energy estimates that gasoline demand in these countries reached 1.3 million b/d in May, the highest level since the pandemic. After the holidays, however, we expect demand to grow only moderately due to high fuel prices despite fuel subsidies. Overall, we expect demand to average 1.3 million b/d for the full year, recovering to 90 percent of 2019.

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