By Colleen Howe and Nidhi Verma
BEIJING/NEW DELHI- Trucking fleets in China are embracing cleaner-burning liquefied natural gas (LNG) for fuel, a trend neighboring India wants to emulate, accelerating a decline in diesel demand and rattling suppliers to the world’s biggest oil importer.
The rise of LNG trucks in China comes on top of world-leading electric vehicle (EV) adoption there and a prolonged economic slowdown, dampening demand in what for decades has been the main driver in oil consumption growth, with crude imports down 2.8 percent so far this year, weakening global prices.
In September, the Organization of Petroleum Exporting Countries (OPEC) warned that LNG truck penetration will weigh on China’s future fuel demand.
Sales of LNG-fueled trucks in China surged in the first half of 2024 after a plunge in local LNG prices to 108,862 vehicles, more than double the same period in 2023, according to information provider CVWorld, with government subsidies and tighter emissions standards in recent years paving the way.
With only 645 LNG-powered trucks operating in India according to transport ministry data, its rollout is at an earlier stage, but the government said in September it aims to convert about one-third of its heavy truck fleet of over 7 million vehicles in five to seven years, a target experts call ambitious.
That could also weaken crude demand growth in India, which analysts expect to become the top consumption driver as Chinese demand stabilizes. – Reuters
