China’s gasoline demand has dropped since the Iran war upended the global oil markets and is on track to decline more than previously expected this year, due to the higher prices and the continued push toward electric vehicles.
China could see its gasoline demand slump by as much as 5.5% this year from 2025, GL Consulting said in its latest forecast reported by Bloomberg on Thursday. Before the war, the China-based consultancy had expected a 5.2% decline in gasoline consumption for 2026.
The expected 5.5% drop in Chinese gasoline consumption would be the second-steepest slump on record, following the 2022 plunge when China was still under severe Covid-related lockdowns.
The increase in gasoline prices, despite government interventions in the sector, is discouraging driving of conventional cars with internal combustion engines, especially in many cities where EVs are more convenient and cheaper ways to move around.
Set OilPrice.com as a preferred source in Google .
Overall Chinese oil demand growth is set to be just 50,000 barrels per day (bpd) year over year in 2026, slowing from 220,000 last year, as demand in the second quarter is plunging, the International Energy Agency (IEA) said in its monthly Oil Market Report this week.
Chinese oil consumption is set to decrease by 290,000 bpd year-on-year in the current quarter “as the ongoing slump in petrochemical feedstocks combines with a slowing outlook for the fuels in the face of a more adverse macro climate and higher fuel prices,” the agency said.
Demand will return to growth in the third quarter, under the agency’s base-case scenario that flows through the Strait of Hormuz would gradually resume after June.
In terms of road fuels, demand growth “is set to slow to a crawl in 2Q26”, as soaring pump prices discourage driving. Chinese retail fuel prices for gasoline and diesel have jumped by around 30% since the start of the Iran conflict and within a whisker of all-time highs set in the middle of 2022, the IEA noted.
By Michael Kern for Oilprice.com
More Top Reads From Oilprice.com
- India’s Wholesale Inflation Hits 3.5-Year High as Fuel Costs Surge 25%
- China Still Cautious on Fuel Shipments Despite Eased Export Rules
- Sinopec Opens Major Ultra-Deep Shale Gas Play in China
