China's refined oil demand is expected to decline at a faster pace in 2025 as the country's energy transition accelerates, said industry experts.

While China's oil demand outlook was recently raised by 100,000 barrels per day, faster adoption and higher usage of electric vehicles keep gasoline demand on track to fall this year, said Ye Lin, vice-president of oil market research at global consultancy Rystad Energy.

Electric truck sales, together with liquefied natural gas and compressed natural gas trucks, are also penetrating the trucking sector, she said.

"The peak and flattening of diesel demand in China is linked to the ongoing changes in its economic model. Additionally, the faster adoption of LNG trucks created further pressure on diesel demand from 2023, contributing to its drop last year."

Publicly available data reveal that NEVs and LNG heavy trucks played a significant role in reducing China's need for traditional fuels in 2024, displacing nearly 53 million metric tons of gasoline and diesel consumption, an overall decline of 2.4 percent year-on-year in refined oil consumption compared to 2023.

According to Ye, China's gasoline and diesel demand has entered a declining trajectory. Greenfield capacities in recent years have been leading the transformation from fuels to petrochemicals, followed by State-owned refineries, actively upgrading their configurations through the adoption of new refining technologies to adapt to the changing markets.

A recently released report by a domestic think tank also predicts that the wider drop in refined fuel demand in 2025 will lead to greater standardization of market order and potentially faster exit of outdated capacity.

China's overall oil consumption dropped year-on-year in 2024, shifting from previous growth, as demand for refined oil products peaked and began to fall.

Last year, domestic refining capacity remained largely stable, output fell, and exports returned to a downward trend, with domestic prices falling more sharply than international crude.

Industry experts believe the oil and gas industry in China is adjusting to new energy trends, harmonizing energy security with a green, low-carbon transition.

China's oil product consumption entered a turning point last year and marked the end of years of steady growth, said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

A shift in economic development models, an efficient integrated transport system and the rapid adoption of cleaner transport have steadily slowed the growth of refined oil consumption in the country, he said.