Sales of road diesel in France experienced a significant year-on-year decline of 13% in September, according to industry data reported by Bloomberg. This decrease in demand for diesel fuel is indicative of a slowdown in the country’s manufacturing activity, as it is essential for both the transport and industrial sectors of the economy.
Emma Howsham, a research analyst at the Wood Mackenzie consultancy, commented on the situation, stating, “The sharp decline in French road transport diesel demand reflects increasing pressure on the French economy and a slowdown in industrial activity and transportation of goods.”
The French economy has recently seen a meager growth rate, with the Bank of France reporting an expansion of only 0.1% in the third quarter. This represents a decrease from the previous quarter, which saw a growth rate of 0.5%.
Adding to the concerns, the country’s manufacturing purchasing managers’ index (PMI), which measures economic health, has reached its lowest level since May 2020, according to S&P Global’s latest data.
France is not the only Eurozone state experiencing sluggish demand for diesel fuel. Germany, Spain, and Italy also saw a decline in diesel sales in September compared to the same month a year ago.
Howsham highlighted that demand for diesel-type fuels in Europe’s OECD countries had decreased by 160,000 barrels per day between January and September compared to the previous year, marking a drop of about 3%.
The International Energy Agency (IEA) had previously released a similar report, stating that consumption of diesel-type fuels in Europe had dropped by 260,000 barrels per day in the last quarter compared to the previous year. In its most recent monthly Oil Market Report, the IEA projected further decline in diesel demand in the region of around 150,000 barrels per day for both this year and 2024.
These trends in diesel sales reflect the ongoing challenges faced by the European economy, particularly in the manufacturing sector. The COVID-19 pandemic and subsequent lockdowns have disrupted supply chains and impacted consumer demand, leading to reduced industrial activity and transportation. The decrease in diesel demand is a clear indicator of this economic slowdown.
As the Eurozone economies continue to grapple with the effects of the pandemic, policymakers and industry leaders will need to address the underlying issues dampening diesel demand. This may involve implementing supportive measures to stimulate economic growth, ensuring a resilient and sustainable industrial sector, and diversifying energy sources for transportation.
In conclusion, the significant decline in road diesel sales in France mirrors the country’s economic challenges, particularly in the manufacturing and transportation sectors. The trend is not unique to France, as other Eurozone states are also experiencing a drop in diesel demand. These developments underscore the need for proactive measures to revive industrial activity and stimulate economic growth in the region.