SEOUL: South Korea’s consumption of refined oil products rose solidly this year on low crude prices, industry data showed Wednesday, providing some relief to local refiners struggling to cope with slumping exports.
Domestic consumption of refined petroleum products reached 283.7 million barrels in the January-April period, up 4.7 percent from a year earlier, according to the data by Korea National Oil Corp. (KNOC).
Sales of naphtha, a key industrial base material, rose 4.5 percent on-year to 138.3 million barrels, with those of gasoline gaining 7.7 percent to 24.9 million barrels. Diesel shipments surged 10.2 percent to 50.6 million barrels.
Sales of kerosene for heating and Bunker-C oil used in power generation jumped 21.2 percent and 7.7 percent, each, to 7.3 million barrels and 13.6 million barrels, with those of jet fuel increasing 11.5 percent to 11.5 million barrels.
Consumption of liquefied petroleum gas (LPG), on the other hand, dipped 2.8 percent on-year to 27.3 million barrels. LPG was the only oil product that reported a drop in sales.
Industry watchers attributed the rise in consumption mainly to weak crude prices, saying that increased sales of petroleum products generally translated into economic recovery in the past.
“This year’s increase in domestic sales is a welcome development that will have a positive impact on refiners’ profits,” an oil company official said. Domestic sales make up roughly a third of all oil products made by refiners, with the rest being exports.
The hike in domestic consumption comes as a blessing to South Korean refining companies that have been struggling to tide over tumbling exports amid weak demand from emerging markets. SK Innovation Co., GS Caltex Corp. and S-Oil Corp., which all posted operating losses last year, reported profits in the first quarter.
