BANDAR SERI BEGAWAN (Commodity Online) : Growing demand for petroleum products in the tiny south-eastern nation of Brunei forced it to import some of its required fuel products for the first time to avoid shortage.

Country's only oil refinery, which was built in 1983, can no longer keep up with the increase in domestic demand for petroleum products, making it necessary for the Sultanate to import some of its required fuel products to avoid shortage.

Demand is fast overtaking the refinery's current production capacity of around 12,000 barrels per day and as a result, the country has to resort to importing some of the required fuel products, especially diesel, to avoid a shortfall in supply, especially during maintenance and shutdown phases of the refinery, said an energy ministry statement.

It would be noted that fuel products sold in the country are subsidised and the situation, according to economists, lends itself to over consumption.

Brunei's fuel consumption rose from 6.8 million barrels in 2000 to 8.52 million barrels in 2006, an average rise of more than 25 per cent in just over a period of six years.

With one of the highest car ownership per capita in the world, Brunei's public transport has been less preferred over the convenience of personal transportation.

The government has had to foot over $1 billion accumulated in subsidy payments for gasoline and diesel.

Last year, fuel subsidies amounted to $153 million. In 2008, Brunei had to cover $340 million, while in 2007, it was $222 million.

In an attempt to create awareness for the importance of fuel subsidies, Brunei on last Monday retracted the subsidies and imposed commercial pricing on gasoline and diesel for a single day as a public awareness campaign for Energy Day 2010.

Brunei's daily crude oil production has been in general decline over the past 36 years, since it peaked in 1974 with about 250,000 barrels produced per day. The Sultanate produced less than 170,000 barrels of the black gold daily last year.