Fuels retailing in Southeast Asia: a booming sector largely shaped by geopolitics and local regulations

Southeast Asia is one of the the strongest demand growth regions for petroleum products. This has attracted oil majors to invest into organic growth of their retail networks in these countries, but strong demand growth also sparked acquisitions from foreign investors new to the region. However, most retail markets of the region remain regulated, where State-dictated price controls exert downward pressure on retail service station profitability. In our report, we examine the reasons of low retail profitability, our expectations on regulatory changes, the impact of low profitability on investments, and the outlook for Southeast Asia in terms of attracting foreign investment during the era of global companies’ decarbonisation efforts.