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India September oil product demand up 1.5% sequentially
The demand for oil products in India grew 6.7% year-on-year and 1.5% sequentially in September on the back of healthy auto sales and factory activities, according to a report by S&P Global Commodity Insights.
All products, including petrol and diesel, saw a growth in demand in September over August. Naphtha and kerosene were the exceptions.
“Middle distillate demand to drive 53% of total Indian oil demand growth in 2023 with gasoline and naphtha together to contribute 28% of the growth,” it said.
India’s oil products demand increased by 73,000 bpd in September owing to robust auto sales and factory activity ahead of the upcoming festival season while the rainfall lagged by 5.6% below the long-period average for this season.
Along with the growth in gasoil, jet fuel and gasoline, LPG also posted strong growth as the government had reduced prices of domestic cylinder by ₹200 per cylinder.
Diesel consumption reported during September was higher by 0.4% on month and up by 3.8% YoY.
Demand remained strong in the mobility sector as evident from the data of e-way bill generation and daily average highway toll transactions. There was some slowness from the agriculture sector and contraction in sales of tractors leading to lower diesel consumption.
The monsoon season ended with a deficit in total rainfall received by 5.6% largely affecting the sowing and harvesting activities. Gasoil demand is expected to be close to 7% above pre-COVID-19 levels this year.
Himi Srivastava, analyst, South Asia Oil Markets, S&P Global Commodity Insights, said: “India’s gasoline demand saw a September increase to 869,000 b/d due to lower rainfall and strong auto sales keeping mobility demand strong. As the temperatures rose, the requirement of running air conditioners in cars also increased thereby increasing the consumption of gasoline. India’s gasoline demand rebounded to above pre-covid-19 levels in 2021 and is expected to be some 23% higher than 2019’s level in 2023.”
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