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2022 Trends in Australian Fuel Usage

Over the past couple of years, we've heard a lot about decreased mobility (i.e. people working from home with their car spending more time sitting in the garage. Various data sources support this, demonstrating that overall levels of movement have been down through the pandemic, with more localised activities (e.g. trips to neighbourhood parks) becoming more common. 

We can also clearly see this trend when we look at fuel volumes over time. As can be seen in the table below, there has been a downward trend over time as diesel vehicles become more common, and vehicles generally become more fuel-efficient, but petrol sales dropped significantly by around 1,500ML between 2019 and 2020 as many Australians faced significant restrictions on their movements. While this trend corrected itself to a certain extent in 2021, total volumes remained well below where they might naturally have expected to sit. Given lockdowns did affect much of the first half of 2021, it is however fair to expect that we'll see a different story in 2022, with many consumers still choosing to holiday locally, and businesses keen to get employees back into offices.

One unexpected byproduct of the pandemic was its impact on where we source our petrol. Going back to 2011, we can see that 80% of the petrol used in Australia was produced locally, with a number of refineries in operation. While this has been trending down over time, we saw a significant decline in 2015 off the back of the closure of two refineries (Caltex's Kurnell plant and BP's Bulwer Island operation). Despite this, the market had held largely steady since then, with around 60% of the petrol used being produced in Australian refineries from imported feedstock.

The pandemic again caused a significant shift here, with a further two refineries closing in 2020 off the back of reduced demand (BP's Kwinana refinery in WA, and ExxonMobil's Altona plant in Melbourne's West). This leaves just two active refineries in Australia, being operated by Ampol in Lytton and Viva Energy in Geelong. While the federal government has stepped in with a level of support, designed to maintain local production and help support Australia's fuel security, these closures mean that more than half of the fuel sold in Australian in 2021 was produced overseas.

Ultimately, these changes will not impact the average Australian in the short term. Even in an environment where we're facing high petrol prices, local production can't serve to offset this, given these are largely driven by offshore factors. That said, while it does create a certain level of risk in terms of fuel security, it also offers the opportunity to improve the quality of Australia's fuel supply by upgrading local refineries, and placing greater restrictions on imported products.

When this happens, it make it more compelling for OEMs to introduce newer vehicles that might be more sensitive to petrol that contains higher levels of sulphur (i.e. VW Group vehicles which use petrol particulate filters), and if there's one thing we know, it is that Australians do enjoy European hot hatches!

Let us know your thoughts in the comments, and feel free to get in touch with our team of auto experts. We’d love to hear from you!

Topics: Automotive Research Thought Leadership Research automotive trends autonomous vehicles automotive news