Mumbai: India’s oil demand in the three months of the financial year that began 1 April grew at the fastest pace for any first quarter period in the past 10 years.
The country consumed 48.5 million tons of oil products in the quarter, an increase of 7.8% from the same period a year ago, according to the oil ministry’s Petroleum Planning and Analysis Cell. That’s the fastest since the first quarter of the year ended March 2007, when growth was 8.4%. Diesel consumption expanded 4.7% to 20.1 million tons and gasoline use increased 10% to 5.9 million tons.
The International Energy Agency expects India to lead the world in oil demand and surpass Japan as the world’s third-largest oil user this year. It will be the fastest-growing crude consumer in the world through 2040, Paris-based IEA estimates, adding 6 million barrels a day of demand, compared with 4.8 million for China.
“We have seen acceleration in India’s oil demand as income levels improve and with infrastructure building picking up pace,” said Richard Mallinson, a geopolitical analyst at Energy Aspects. India’s oil demand may grow by 400,000 barrels a day in 2016 and 2017 “faster than any other country,” he said.
The growth in consumption has a cyclical element to it with the first quarter being slower than the other three in a year. In the previous three quarters demand climbed at least 11%.
“Normally, demand is low in the first quarter and picks up post monsoons,” said P. Balasubramanian, director-finance at the country’s second-largest fuel retailer Bharat Petroleum Corp. The four-month rainy season began in June.
The country consumed 15.6 million tons of oil products in June, an increase of 6.2% from the same month a year earlier. Diesel consumption rose 1.5% to 6.4 million tons and gasoline sales climbed 4.4% to 1.8 million tons. The monthly growth in diesel sales was the slowest since July 2015 and that in gasoline since November 2014. Bloomberg