India’s fuel demand rose to its highest level in two decades in February, with fuel consumption rising more than 5% to 4.82 million barrels per day (18.5 million tonnes), according to data released on Thursday. This is the 15th consecutive year-on-year increase, and was the highest demand recorded till 1998 in data compiled by the Petroleum Planning and Analysis Cell (PPAC) of the Indian Oil Ministry.
Record Russian crude imports in February fueled a combination of profitable refining, overall utilization for primary distillates across India, and still-strong domestic consumption fueled demand for fuel. Gasoline sales rose 8.9% year-on-year to 2.8 million tonnes, while diesel consumption rose 7.5% to 6.98 million tonnes. According to the data, jet fuel sales also increased by over 43% to 0.62 million tonnes.
The strength in demand highlights industrial activity in Asia’s third-largest economy, which has been boosted by cheap Russian oil. Jet fuel demand is expected to show the highest growth rate in 2023, followed by gasoline and diesel/gas oil. Despite the fact that the sales data for both petrol and diesel showed a decrease in overall volume in February as compared to January, they experienced a significant increase in daily consumption.
While sales of bitumen, a road construction material, grew by 21.5% on a monthly basis, LPG, or liquefied petroleum gas (LPG), sales declined by 0.1% to 2.39 million tonnes. Meanwhile, fuel oil use fell only 5% in February compared to January.
It is estimated that demand will peak at 5.17 million barrels per day (bpd) in March, and then fall to 5 million bpd in April-May due to a seasonal monsoon-driven slowdown. According to the International Energy Agency, the increase in fuel demand is a sign of a rapidly growing economy, and India is set to become the world’s third largest energy consumer by 2030.
frequently Asked question:
Q1: What was the reason for the increase in India’s fuel demand in February?
India’s rise in fuel demand in February was attributed to a combination of factors, including profitable refining from record Russian crude imports, overall utilization for primary distillates across India and strong domestic consumption.
Q2: What is the estimated fuel demand growth rate in 2023?
According to Alan Gelder, VP Refining, Chemicals and Oil Markets at Wood Mackenzie, the strongest demand growth rate in 2023 is forecast to be in jet fuel, followed by gasoline and then diesel/gas oil.