INDONESIA'S growing demand for petrol could help pry open a new trade route for the motor fuel in the next five years, as cargoes start heading to Asia on a regular basis from a European market awash with supplies.
Asia has plenty of petrol supplies now. Taiwan, China, South Korea, Singapore and India provide more than the region can absorb, from key exporters such as Reliance Industries , SK Energy and Formosa Petrochemical Corp.
But Indonesia is set to become the world's biggest importer of the motor fuel by 2018, outstripping the United States and Mexico combined, offering refiners a market as Europe remains well supplied and as the US cuts imports due to a shale oil boom.
The surge in Indonesia's demand could also flip Asia into having a deficit of petrol, helping drive a recovery in the profitability of processing a barrel of crude into the product.
"Even after factoring in refinery closures, Europe will still need to manage their surplus," said Sushant Gupta of Woodmac.
Refinery closures in Japan and Australia, because of poor local margins, will draw down Asian supply.
Petrol demand in Asia is expected to grow in the three to four per cent range annually between 2012 and 2015, said Victor Shum of energy information group IHS.
Rare petrol cargoes from Europe are already arriving in Asia, with the latest reaching Indonesia next month from Norway.
But the Europe-to-Asia petrol flow could become a regular feature of the market in years ahead, especially during Ramadan, Gupta said, when fuel use rises as people return home to rural areas to be with their families.
Indonesia's petrol deficit is likely to grow to 420,000 barrels per day (bpd) in 2018, compared with an estimated 360,000 bpd this year, even if state-owned oil company Pertamina adds a new 60,000 bpd residue fluid catalytic cracker in 2015 to its Cilacap refinery, Woodmac said in a report.
The Asian petrol margin - the profit or loss from refining Brent crude into the motor fuel - fell to almost US$2.10 (RM6.70) a barrel on October 4, versus this year's average so far at nearly US$8.60 a barrel, as the petrol surplus has increased.
But the surplus, forecast at 55,000 bpd in 2012, will flip into a deficit of 118,000 bpd in 2018, said Woodmac, a view shared by JBC Energy.
"Overall, we forecast the Asian petrol surplus to vanish by around 2017, 2018, after which the region is expected to turn into a net importer," said David Wech of JBC. Reuters