India’s fuel demand hit its highest level in at least 24 years in February, data showed on Thursday, as industrial activity in Asia’s third-largest economy was boosted by cheap Russian oil prices.
Fuel consumption, an indicator of oil demand, rose by more than 5% to 4.82 million barrels per day (18.5 million tonnes) in February, marking the fifteenth straight year-on-year increase, according to the data.
Demand is the highest on record since 1998, according to data compiled by India’s Petroleum Ministry’s Petroleum Planning and Analysis Cell (PPAC).
The demand strength is due to a combination of profitable refineries thanks to record imports of Russian crude in February, India’s use of full primary distillation and still high domestic consumption, said analyst Viktor Katona, head of crude oil at Kpler.
Katona forecasts demand of 5.17 million barrels per day (bpd) in March, followed by a seasonal slowdown due to the rainy season which will lead to a drop to 5 million bpd in April-May.
Gasoline sales increased 8.9% YoY to 2.8 million tonnes in February, while diesel consumption increased 7.5% to 6.98 million tonnes.
Jet fuel sales jumped more than 43% to 0.62 million tonnes, data showed.
“For 2023, the highest demand growth rate is expected for jet fuel, followed by gasoline and diesel/diesel,” said Alan Gelder, vice president of refining, chemicals and petroleum markets at Wood Mackenzie.
While the fuel sales data showed that the total volume of gasoline (motor spirit) and diesel (HSD) fell in February compared to January, they increased sharply on a daily consumption basis because February is such a short month, said Mr. Gelder.
Sales of cooking gas or liquefied petroleum gas (LPG) fell 0.1% to 2.39 million tonnes.
Sales of asphalt, which is used in road construction, jumped 21.5% month-on-month, while use of fuel oil fell by more than 5% in February, compared to January.
