Malaysia Refined Petroleum Products Market - Growth, Trends, and Forecasts (2023-2028)

The Malaysian refined petroleum products market was estimated to have a value of about USD 15,078.93 million at the end of 2022. It is projected to register at a CAGR of about 2.3% during the forecast period.

The market was negatively impacted by COVID-19 in 2020. It has now reached pre-pandemic levels.

Key Highlights

• Over the long term, the major driving factor of the market is expected to be the surging demand for refined petroleum products in the country.
• On the flip side, the increasing adoption of alternative fuel vehicles (AFVs) is expected to slow down the growth of the market during the forecast period.
• High demand for LPG from the petrochemical sector is expected to create immense opportunities for Malaysia's refined petroleum products soon.

Malaysia Refined Petroleum Products Market Trends

Petrol Product Type Expected to Dominate the Market

• Petrol, also known as gasoline, is a petroleum-derived flammable liquid used in most spark-ignited internal combustion engines, such as passenger cars, motorcycles, and commercial vehicles. Petrol is produced by the fractional distillation of crude oil, enhanced with various additives to induce particular properties.
• On average, the refineries produce about 19 to 20 gallons of petrol from a barrel of crude oil. Petrol used in vehicles is added with various additives. Furthermore, these additives resist igniting too early, reducing the efficiency of reciprocating engines.
• The blends of a compound such as tetraethyl lead and other chemicals are added to petrol to improve its chemical stability and performance characteristics, control corrosiveness, and provide fuel system cleaning. Furthermore, petrol sometimes also contains chemicals such as ethanol, methyl tertiary-butyl ether, or ethyl tertiary-butyl ether, which improves the overall combustion of the vehicles.
• Moreover, due to government subsidies, Malaysia has the 10th lowest petrol prices in the world. In 2022, the petrol price was around USD 46.6 cents per liter. The demand for petrol is likely to grow in the near future due to rapid industrialization and urbanization in the country. This development has resulted in higher demand for passenger vehicles and two-wheelers in the country.
• Furthermore, in 2021, the country had about 4,000 retail fueling stations. Petroliam Nasional Berhad and Shell PLC are significant companies in Malaysia in terms of operational retail fueling stations. Both of these companies have more than 1,000 retail fueling stations. The number of retail fueling stations is expected to grow in the near future as new companies enter the retail fuel market. Five Petroleum Malaysia launched its first petroleum station in the country in 2020. In April 2022, Petros, one of the leading companies in the country, also announced a new multi-fuel service station. Such developments are expected to boost the sale of petrol in the country during the forecast period.
• Therefore, based on the factors mentioned above, petrol product type is expected to dominate the Malaysian refined petroleum products market during the forecast period.

Surging Demand for Refined Petroleum Products Driving the Market Demand

• Malaysia has witnessed a steady growth in sales of manufactured refined petroleum products for the past several years. The increase in refined petroleum products can be mainly attributed to the growing demand for LPG as cooking fuel in homes and particularly as a transport fuel.
• Malaysia has invested heavily in refining activities during the past two decades to meet its demand for petroleum products with domestic supplies. As of 2021, Malaysia has about 880,000 barrels per day (b/d) refining capacity in seven facilities spread across the country.
• As part of Malaysia's goal to construct the oil refining and storage hub to meet the domestic demand for refined petroleum products, Petronas has invested about USD 16 billion in the Refining and Petrochemicals Integrated Development Project (RAPID) in Johor. At the same time, an investment of nearly USD 11 billion for associated facilities. The project has a nameplate capacity of 279,000 b/d and is expected to be fully commissioned by the end of 2022. The RAPID facility will be the country's first refinery to produce diesel and gasoline that meet the Euro V standard, which lowers carbon dioxide emission levels.
• However, with the growing demand for petroleum products and Malaysia's focus on self-reliance to meet the demand, the downstream infrastructure in the region is expected to increase significantly in the coming years. The country has formulated plans to either expand the current refineries or construct new ones.
• Furthermore, Malaysia is planning on increasing downstream activities by creating higher value-added petroleum products and becoming the oil and gas storage and trading hub in the region. In 2021, approximately 763 thousand barrels of oil were consumed daily in Malaysia. Therefore, Malaysia's plan to increase the refined petroleum plant's capacity is expected to boost the refined petroleum products market.
• Therefore, owing to the above-mentioned factors, the growing demand for petroleum products is expected to drive the Malaysian refined petroleum products market during the forecast period.

Malaysia Refined Petroleum Products Market Competitor Analysis

The Malaysian refined petroleum products market is fragmented in nature. Some of the major players in the market (in no particular order) include Chevron Corporation, Petroliam Nasional Berhad, Shell PLC, FIVE Petroleum Malaysia Sdn Bhd, and Petron Malaysia Refining & Marketing Bhd.

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