New Delhi: India’s fuel demand may rise 3.8% in 2012 led by diesel and gasoline, the International Energy Agency (IEA) said on Wednesday, adding a recent retail price hike by Asia’s third largest oil consumer will not dent demand growth in the short term.
IEA, an adviser to 28 industrialized countries, in its July report, forecasts India’s fuel demand to rise 132,000 barrels per day (bpd) to 3.6 million bpd in 2012 despite a likely slowdown in economic growth to 7.8% in that fiscal.
It said India’s fuel demand may rise 3.7% or 124,000 bpd in 2011 to 3.46 million bpd, unchanged from its June estimates, on expectations of strong economic growth of 8.2%.
India last month raised prices of diesel, cooking gas and kerosene to soften the blow of high crude oil prices on state-run firms’ finances.
“While the price increases should help offset revenue losses by refiners who have faced rising crude prices, the prices of the affected products remain regulated and the price hikes are likely not enough to significantly dent oil demand growth in the short term,” the Paris based agency said.
IEA expects India’s diesel demand, which accounts for about 40% of the fuel demand, to rise 5.8% in 2011 to 1.37 million bpd this year and 5.5% next year to 1.44 million bpd, it said.
Gasoline demand would rise 7.6% to 363,000 bpd in 2011 and 6.7% to 388,000 bpd in 2012.
Oil ministry has forecast oil-product sales to rise 4.6% in the financial year that began 1 April.