India’s oil demand to grow 4 per cent on year in October-December: S&P Global
In the initial six months of the fiscal year 2024-25, the nation witnessed a 3% increase in the utilization of petroleum items, reaching 117.7 million tonnes, in contrast to the 114.2 million tonnes recorded in April-September 2023, according to statistics provided by the Petroleum Planning and Analysis Cell.
The fourth quarter of the current calendar year is projected to witness a nearly 4% surge in India’s request for oil and refined oil products in contrast to the same period last year, as reported by S&P Global Commodity Insights.
The forthcoming festive period is poised to boost progress, complementing the revival seen in the agricultural industry post the substantial rainfall endured in the monsoon phase.
S&P Global Commodity Insights predicts that India will experience a surge in its oil product consumption in the October-December quarter due to the upcoming festival and agricultural seasons. This growth is anticipated to offset the previous dampened demand caused by heavy monsoon rains, with the agency forecasting a 3.5%-4% increase in the nation’s oil requirements compared to the previous year.
Himi Srivastava, South Asia oil analyst at S&P Global Commodity Insights, anticipates a 3.5%-4% year-over-year growth in India’s oil demand for Q4. The forecast suggests a yearly rise of 50,000-55,000 barrels per day in gasoline and diesel demand during the quarter, with a potential slight hindrance from the northeast monsoon rains.
In the initial six months of the fiscal year 2024-25, the nation’s utilization of petroleum items increased by 3% to 117.7 million tonnes, contrasting with 114.2 million tonnes in April-September 2023, according to information from the Petroleum Planning and Analysis Cell. Nonetheless, in September, the consumption experienced a decrease of 2% to 17.9 million tonnes.
In September 2024, India witnessed a decline in oil consumption compared to the previous year, primarily attributed to excessive rainfall impacting transportation, construction, and mining operations. Notably, the demand for diesel experienced a notable drop of almost 2% year-on-year. Conversely, gasoline demand showed resilience, registering a 3% increase compared to the previous year, albeit lower than the previous month’s figures. Srivastava highlighted that the country experienced an 8% surplus in rainfall compared to the long-term average for the year.
Analysts anticipate that the demand for transportation fuel will receive a significant boost due to the festive season as well as the forthcoming elections in Maharashtra and Jharkhand.
Srivastava also mentioned that the upcoming elections in significant states such as Maharashtra and Jharkhand are likely to drive the demand for transportation fuel. Moreover, with the wedding season spanning from November to January, there is traditionally a surge in both automobile purchases and the movement of goods, consequently leading to a rise in fuel consumption.
India satisfies 85% of its need for crude oil through imports. Prices of Brent crude oil slightly rose on Thursday, maintaining stability at approximately $76 per barrel amid ongoing uncertainties surrounding a potential Israeli attack on Iran.
