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New Delhi: India imported a record 4.93 million barrels of oil per day (bpd) in January to feed its expanded refining capacity and meet rising demand, ship tracking data obtained from sources and data compiled by Thomson Reuters Oil Research & Forecasts showed.

The world’s third-biggest oil importer shipped in 13.6% more oil in January than a year earlier and about 12.5% more than the previous month, the data showed.

Oil imports in January were high as state-run refiners, which operate two-third of India’s nearly 5 million bpd capacity, usually boost runs in the March quarter to meet government-set targets.

“All refineries are running high amidst a strong recovery in demand, leading to higher (oil) imports," said Senthil Kumaran, senior oil analyst at FGE.

India, which imports about 80% of its oil needs, has emerged as a key driver for growth in global oil demand. Due to higher imports and rising global crude prices, India’s oil import bill in January surged by 42.6% from a year ago to $11.66 billion.

The country is set to surpass China as the fastest-growing oil products market in Asia, with fuel demand growing by 6.1% in 2018, according to a report by the U.S. Energy Information Administration.

FGE expects India’s January crude runs to reach 5.27 million bpd, about 280,000 bpd higher than a year earlier, as the country’s new refining capacities are operating at almost full rate. India has not yet published refining data for January.

Spring maintenance

“The (crude) runs are high before the spring maintenance in India and elsewhere in the region. Margins are good and so is demand, why wouldn’t they run?" Kumaran added.

India’s refining capacity addition of 170,000 bpd at the Kochi and Bathinda plants, along with Indian Oil Corp’s 300,000 bpd Paradip refinery, are operating at a full rate.

Last year, Reliance Industries Ltd, operator of the world’s biggest refining complex, in Jamnagar, Gujarat, declared 30% higher capacity of its export-focused plant.

India is increasing refining capacity to keep pace with expected growth in fuel demand, as Prime Minister Narendra Modi seeks to boost the manufacturing sector.

The country aims to lift its refining capacity by 77% to 8.8 million bpd by 2030, according to a government report.

Global oil majors Saudi Aramco, Rosneft PJSC, BP Plc, Royal Dutch Shell and Total SA are vying to tap a sizeable share of fast-growing Indian fuel markets.

India’s annual fuel demand rose 10.3% in January, with consumption of diesel and gasoline rising in double digits. Reuters

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