Despite low crude prices, Qatar’s non-oil economy is still strong – unlike the more sluggish growth of neighboring Gulf countries – and its demand for refined oil products has more than doubled in five years with huge infrastructure investments ahead of the 2022 FIFA World Cup and its expansion of the civil aviation industry.
Qatar’s average daily consumption of refined oil products -- including gasoline and jet fuel – hit a record 228,000 barrels per day between January and May 2016, Bloomberg reports, quoting data by the Joint Organisations Data Initiative (JODI).
That’s more than double the demand from 2011.
Qatar is investing US$200 billion to upgrade its infrastructure for hosting the World Cup, although its treatment of migrant workers at facilities has sparked huge controversies. The country is also investing in the fleet expansion of Qatar Airways, which has pushed kerosene demand up to 113,000 barrels a day on average between January and May this year, doubled compared to 2014.
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Qatar’s economy looks healthy, although it had to increase utility and energy prices to fill in budget gaps that opened up with the oil price crash. The International Monetary Fund (IMF) expects Qatar’s real GDP to grow by 3.4 percent, both in 2016 and 2017, with consumer prices seen up 2.4 percent this year and 2.7 percent in 2017. Related: Is The Oil Production Efficiency Boom Coming To An End?
Talking to Bloomberg on the phone, John Sfakianakis, director of economics research at the Gulf Research Center, said: “Purchasing power in Qatar is extremely high, which will allow people to continue consumption of petroleum products despite price increases.”
That’s countering the general slowdown trend of many economies in the Gulf, with low crude prices taking their toll and also prompting Saudi Arabia – OPEC’s biggest producer – to cut subsidies for gasoline in order to shore up huge budget deficits.
And now that we mentioned OPEC, Qatar’s Minister of Energy and Industry and current OPEC President, Mohammed Bin Saleh Al-Sada, rekindled rumors and speculations earlier this month with a statement announcing that an informal meeting will take place in late September. Rumors have been flying since about who’s joining, and if will they will ever reach a deal to cap crude production.
By Tsvetana Paraskova for Oilprice.com
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