By Mohi Narayan

NEW DELHI (Reuters) -Global petrol demand growth could halve in 2024, squeezing second-half refinery margins, analysts said, driven by a shift to electric cars in China and the United States and a return to normal consumption after last year's bounce following COVID-19.

In the lowest growth since 2020, demand is likely to rise 340,000 barrels per day (bpd), to stand at 26.5 million bpd this year, says consultancy Wood Mackenzie, down from growth of 700,000 bpd last year, as China nears the point of peak transport fuel demand and the U.S. has surpassed it.

"Penetration of electric vehicles has been increasing in U.S. and China," said Woodmac analyst Sushant Gupta.

"For this year Chinese demand will grow by only 10,000 bpd, due to higher EV uptake."

Consultancy Rystad Energy pegs global gasoline demand at about 26 million bpd in 2024, up about 300,000 bpd from growth of about 700,000 bpd in 2023, fuelled by the consumption boom after the pandemic, said analyst Mukesh Sahdev.

China, once the world's driver of gasoline demand, is expected to account for more than half of all EV sales this year, the International Energy Agency has said.

Gasoline consumption by the world's largest crude importer is set to grow by about 1.3%, or about 2 million tons, to 165.1 million metric tons (3.8 million bpd) this year, forecasts by a research arm of China National Petroleum Corp (CNPC) show.

The research arm of China's biggest refiner, Sinopec, expects gasoline demand to rise by 1.7%, or about 3 million tons, to stand at 182 million tons this year.

As falling prices spur demand, the share of electric cars sold this year could reach 45% in China, about 25% in Europe and more than 11% in the United States, the IEA estimates.

By comparison, booming car sales, along with high economic growth and low EV penetration, are driving gasoline demand in India and Indonesia.

India's petrol consumption will hit a fresh record of 39.2 million tons (908,000 bpd) in the year to March 2025, up about 5% from 37.2 million tons in the year to March 2024, government estimates showed.

MARGIN PRESSURE

U.S. gasoline consumption fell to about 376 million gallons per day (8.94 million bpd) in 2023 after hitting a record 392 million gallons in 2018, according to the U.S. Energy Information Administration.

Demand in 2024 is expected to be flat, analysts said.

As a result, U.S. refining margins are expected to stay under pressure after the peak summer driving season, Woodmac and Rystad analysts said.

In Europe, gasoline demand will grow by 50,000 bpd or 2.3% in 2024 to 2.19 million bpd, in line with recent years, FGE said.

Stagnant European petrol demand and rising competition from Nigeria's new Dangote refinery, the largest in Africa and Europe that could add 280,000-300,000 bpd of gasoline to global balances, will put European refining margins under pressure, Woodmac said.

Gasoline margins across the United States and Asia have gained 85% this year, to stand at about $29 from a barrel of WTI crude on May 1 and 29% and about $13 from a barrel of Brent crude on April 30, respectively, on expectations of robust summer demand, LSEG data showed.

Margins gained strength early this year due to scattered refinery outages in Asia and the U.S., while higher freight costs due to attacks on Red Sea shipping and Russian energy infrastructure supported European gasoline markets. [REF/OUT]

Eurobob gasoline was worth around $23 from a barrel of Brent crude on May 1, up from the $19.67 average in April last year, the data showed.

(Reporting by Mohi Narayan, additional reporting by Robert Harvey in London and Aizhu Chen in Singapore; Editing by Florence Tan and Clarence Fernandez)