Steep decrease in demand for petroleum taking a toll on the industry
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Cape Town - The increased number of people working from home or hybrid working – where people work from home some days of the week and from the office on other days of the week – with the Covid-19 restrictions over the past 20 months was taking a toll on the petroleum industry.
Petroleum associations, economists and the Department of Mineral Resources and Energy (DMRE) noted a steep decrease in the demand for petroleum, which was particularly low in 2020 when the true effects of the pandemic started taking shape across the different sectors.
The DMRE said this affected the petroleum industry in that the sales for petroleum products dropped at retail and wholesale level, which provided an opportunity for oil companies to review their business operational models.
“The biggest cause of the depressed demand was the restricted movement both nationally and internationally due to the various phases of Covid-19,” said the department.
In addition, Transport Mayco member Rob Quintas said the City noticed a decrease in traffic which coincided with the emergence of the Covid-19 pandemic in 2020 and the subsequent hard lockdown in March and April 2020.
“Traffic figures slightly increased as the alert levels have been eased after every wave. However, traffic volumes are still not on the same level as before Covid-19,” said Quintas.
He said it was difficult to predict when traffic volumes would reach pre-pandemic levels again as they would have to see whether there were changes in how and when people travelled in future.
Quintas encouraged those who could to keep on working from home, and to travel outside of peak hour periods as this would assist with easing traffic congestion on roads and lowering carbon emissions.
Economist Dawie Roodt also observed this collapse in the demand for petroleum and said it was important to remember that this was taking place during an energy shift where people and businesses were moving away from “dirty energy”.
“In the history of mankind, we utilised many different sources of energy over the centuries but always stopped using a particular source of energy before we ran out of it. That was probably going to happen to oil as well.
“We are in a process where we are gradually weaning ourselves off of dirty energy,” said Roodt.