The strict stay at home orders during the lockdown of France resulted in a 80 per cent drop in petrol consumption in the last 10 days of March as cars remained off the road because of the travel restrictions, said a report published by the industry body Comite Professionel du Petrole (CPDP).
According to reports quoting the data from the body, the drop in consumption of diesel in the same period was 75 per cent compared to its consumption in the same period last year according to the data from the monthly consumption report published by the CPDP.
The combination of the two resulted in an overall drop of 22 per cent in petrol consumption and a 26 per cent drop in diesel consumption for the entire month of march, showed data form the report.
The French residents have been ordered by the government to stay indoors from March 17 until at least April 15 except for going out for essential purposes such as for medicines or getting essential household goods.
This has also been the trend in many countries around the world that have imposed national lockdowns or imposed severe restrictions on traveling.
Oil companies are feeling the pinch of the situation too.
On Tuesday, United States based energy giant Exxon Mobil Corp said that it would be cutting back on a multi-year investment in shale, LNG and deep water oil production while also reducing its capital expenditure by 30% for the current year because of the drop in demand for petroleum products because of the coronavirus pandemic as well as the plummeting of oil prices.
The restrictions on traveling within the country as imposed by many countries to curb the spread of the coronavirus – with international air travel almost completely shutdown globally, has forced global oil companies to retract on their previous announcements on spending and increasing production by an average reduction of at least 20 per cent.
Additionally, price of crude oil has sunk by almost 60 per cent so far this year even as demand for oil continues to fall sharply.
“We haven’t seen anything like what we’re experiencing today,” Chief Executive Darren Woods said on Tuesday as Exxon detailed spending cuts, the last of the oil majors to do so.
While announcing a cap on capital expenditure at $23 billion for 2020 after promising last month of “significant” cuts to spending, Exxon, the largest US oil producer said that it could also further lower the cap on capital spending if necessary.
Earlier, the company had projected capital expenditures of upto $33 billion for the current year. It had spent $26 billion under the same head last year.
Woods said that the company now expects a drop of between 25 per cent and 30 per cent in the short term in the global oil demand.
“Storage is becoming very tight. Logistics are becoming tight. I think we’ll see around the world as logistics get constrained, there will be shut-ins across the industry,” Woods said, adding it was “very difficult to predict what those will look like.”
(Adapted from Reuters.com)