In February 2015, oil demand in Brazil declined substantially by 0.17 mb/d or around 7% y-o-y. Total consumption was at 2.34 mb/d, the lowest level since March 2014. The decline was led by gasoline and diesel oil, which eased by 73 tb/d or more than 9% y-o-y and by 0.14 mb/d or 13% y-o-y, respectively. The reduction in gasoline demand was attributed to an announcement by the Brazilian government increasing gasoline excise duties, which took effect at the beginning of February 2015. As a result, retail prices for gasoline soared by around 7%, lowering gasoline consumption. Demand for diesel also declined, with total consumption at 0.91 mb/d, as truck drivers went on strike to oppose high fuel costs. This resulted in reduced truck movements and slowed trading as well as reduced agricultural activity in the country. Fuel oil demand slowed by 7 tb/d or around 6% y-o-y.
Oil consumption in Argentina declined slightly in January; transportation fuels eased, with diesel registering the most notable shrinkage, having a decline of more than 15% y-o-y. As highlighted previously, vehicle sales are projected to drop in 2015, as the government's scheme of subsidizing car purchases is expected to be eliminated, impacting sales growth and thus reducing transportation fuel consumption. Looking ahead, risks for 2015 oil demand growth in Latin America are currently pointing downward much like the previous month, as economic activity in Brazil is predicted to be slower than in 2014 and an increase in excise duties for gasoline is assumed to reduce gasoline consumption. Conversely, low oil prices in addition to the expectation of a hotterthan-average summer season should keep demand for power generation up. Latin American oil demand grew by 0.20 mb/d in 2014. During 2015, oil demand growth is forecast to be marginally lower than the previous year, reaching 0.19 mb/d.