SINGAPORE: India’s oil-product consumption in January rose 7.5% from a year earlier, driven mostly by use of naphtha by power producers and demand for transport fuels, according to the International Energy Agency (IEA).
Demand for naphtha jumped 28% from a year earlier because of a shortage of natural gas, IEA said in a report on Tuesday. Petrol sales rose 8.5% and demand for diesel gained 8.2%, it said.
Rapid economic expansion has spurred consumption of electricity and transportation fuels as power plants and factories run at close to capacity. Government-capped fuel prices and growing affluence have boosted car sales.
IEA raised its 2007 forecast for oil demand in India to 3.1%, or about 2.7 million barrels a day, from 2.6% earlier.
The country’s industrial production grew 10.9% in January from a year earlier, more than expected, as domestic factories raise output to meet surging consumer demand, the Central Statistical Organization said on Monday. Maruti Udyog Ltd, India’s biggest car maker, last month posted its fastest sales growth in three years.
India will build its first strategic crude oil storage of five million tonnes by 2012 and will raise it to 15mt in the next phase as part of steps to ensure energy security, the Rajya Sabha was informed on Tuesday.
“In order to enhance the energy security of the country and to safequard against short-term supply disruptions, the government has approved letting up of five million tonnes strategic storage of crude oil,” minister of state for petroleum and natural gas, Dinsha Patel, said.
The storage would be spread over three places—Visakhapatnam (one mt), Mangalore (1.5mt) and Padur, Udipi (2.5mt), he said.
The crude oil will be released in the event of any natural calamity or disruption in supplies or any unforeseen global event, leading to scarcity of supplies or abnormal increase in prices.
“This project is likely to be completed by the end of the 11th Five-Year Plan (2012),” Patel said, adding that the government is planning to enhance the capacity of the strategic reserve to 15mt in the next phase.
PTI contributed to this story