India’s March oil demand upsurges to a record-high 4.33 million barrels per day
India’s oil demand escalated to a record high of 17.10 million metric tons (4.33 million barrels per day) in March as strong vehicle sales, infrastructure push, the government’s LPG penetration scheme, and robust air travel supported consumption across the barrel. This is according to a new report released by Platts, an independent provider of information and benchmark prices for the commodities and energy markets.
In absolute terms, India’s oil demand pales in comparison with China’s implied oil demand of 11 million barrels per day, but in terms of growth, India is clearly leading the way.
Demand in March rose 16.4% year on year — the second highest growth rate in over a decade. In the first quarter, India consumed an average 4.24 million barrels per day, up 13% year on year. This compares with a 0.9% year-on-year apparent oil demand growth seen in China for the first two months of the year, according to Platts data.
“Sustained growth in commercial vehicle sales, especially the medium and heavy vehicle segment, remained a key propelling factor for the demand boost,” Facts Global Energy said in a report Wednesday.
In the first quarter of 2016, India’s diesel demand has risen 11.3% year on year to 19.5 million metric tons, the PPAC data showed.Diesel, which accounts for roughly 40% of India’s total oil products demand, rose 15.12% year on year to a record high of 6.78 million metric tons, data released earlier this week by the Petroleum Planning and Analysis Cell showed. According to analysts, better fleet utilization and strong commercial vehicle sales have boosted diesel demand.Demand for transport fuels would have also been helped by the ongoing campaign for assembly elections in four states.
Gasoline demand in March rose a whopping 21.5% on year in March to a record high 2.05 million metric tons, the data showed. Demand was also up 11.3% from February.
“The two biggest automakers in India, Maruti Suzuki and Hyundai, both posted their best ever sales in the country in the fiscal year 2015-2016 (April-March),” FGE said, adding that overall, lower pump prices and a shift in consumer preference towards gasoline vehicles have been among the primary reasons boosting gasoline demand. Gasoline demand has risen 15.3% year on year in first-quarter 2016.
LPG demand in March also reached a record high of 1.835 million metric tons, up 14.16% on year, driven by the government’s push to increasing LPG penetration in rural households.
Jet fuel demand rose to a record high of 563,000 metric tons in March — up 8.8% year on year, the PPAC data showed. Demand in Q1 2016 for jet fuel has risen 10% year on year.
India’s demand for naphtha, a flammable liquid made from distilling petroleum, rose 3% year on year to 1.211 million metric tons with demand in Q1 2016 rising 14.5% year on year.
Demand for fuel oil, meanwhile, soared nearly 40% year on year to 697,000 metric tons in March, and was up 25% year on year in Q1 2016, the PPAC data showed.
According to FGE, though natural gas is preferred over fuel oil by industry and power users, low prices have provided support to demand. “Going forward, we expect fuel oil demand to come off as the cheaper renegotiated LNG prices start filtering through to consumers,” it said in its report.
Source: Platts