India’s February fuel demand rises, but surge in crude could slow rise

India’s fuel consumption rose 5.4% in February from the same month last year, the biggest year-on-year jump since August 2021, but soaring oil prices could slow the recovery third largest oil importer and consumer in the world.

Fuel consumption, an indicator of oil demand, totaled 17.57 million tonnes for the month, according to data from the Petroleum Ministry’s Petroleum Planning and Analysis Cell (PPAC).

While India has been on the road to recovery so far, high oil prices at the moment could lead to some demand destruction, Refinitiv analyst Ehsan Ul Haq said, adding that the Supply will not be a problem for India since Russian barrels can be replaced by Western Asia. raw.

“The elections are over and as a result, end consumers will bear the brunt of high gasoline and diesel prices, which could thwart demand recovery,” Ul Haq added.

Rising crude oil prices and supply disruptions following Russia’s invasion of Ukraine could further undermine an Indian economy already slowed by COVID-19, economists have said.

Indian state refiner Bharat Petroleum Corp. is seeking additional oil from West Asian producers for April amid concerns Western sanctions on Russia will affect Urals crude deliveries, a source familiar with the matter said.

India ships about 85% of its oil needs

Demand was about 0.8% higher than the same period in 2019 before the pandemic, but nearly 3% lower than the 18.11 million tonnes in February 2020, before the country went into lockdown due to of the increase in COVID-19 cases.

Cooking gas or liquefied petroleum gas (LPG) sales rose 6.1% to 2.40 million tonnes, while naphtha sales fell 2.4% to 1.19 million tons, while gasoline sales increased by 3.2% compared to the previous year, to 2.55 million. tons.

Diesel was down 0.9% from the same period last year, but was up 2.2% on a monthly basis.

Published on

March 10, 2022

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