𝐂𝐲𝐜𝐥𝐨𝐧𝐞 𝐁𝐢𝐩𝐚𝐫𝐣𝐨𝐲'𝐬 𝐃𝐞𝐯𝐚𝐬𝐭𝐚𝐭𝐢𝐧𝐠 𝐈𝐦𝐩𝐚𝐜𝐭: 𝟖𝟎𝟎 𝐔𝐩𝐫𝐨𝐨𝐭𝐞𝐝 𝐓𝐫𝐞𝐞𝐬, 𝟓𝟎𝟎 𝐇𝐨𝐮𝐬𝐞𝐬 𝐃𝐚𝐦𝐚𝐠𝐞𝐝, 𝐚𝐧𝐝 𝟐𝟑 𝐈𝐧𝐣𝐮𝐫𝐞𝐝

 

India’s consumption of petrol and diesel hit another record in May, highlighting robust demand for transportation fuels in one of the world’s top consumers of crude oil, official data shows.

The country stands out as one of the bright spots in terms of demand outlook amid apprehensions over global fuel demand, partly due to recessionary concerns.

Consumption of diesel, the most consumed refined petroleum product in India, rose 12.8 per cent year-on-year (YoY) and 5 per cent month-on-month (MoM) to 8.22 million tonnes in May, as per an analysis of data released by the Petroleum Planning & Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas. Diesel accounts for a little over 40 per cent of all petroleum products consumed in India, followed by petrol, which has a share of around 17 per cent. Petrol consumption in May was 3.35 million tonnes, up 11 per cent YoY and 16.4 per cent MoM. The previous record for diesel consumption was as recent as April; in the case of petrol, it was in March. This trend of frequent highs reflects sustained robustness in India’s fuel demand.

The country’s overall petroleum product consumption, a proxy for crude oil demand, rose 9 per cent YoY and 8 per cent MoM in May to 20.03 million tonnes. But it was lower than the record level of 20.50 million tonnes in March this year.

Other major petroleum products consumed in India include liquefied petroleum gas (LPG), naphtha, aviation turbine fuel (ATF), petroleum coke and bitumen, among others.

India is the world’s third-largest consumer of crude oil and depends on imports to meet over 85 per cent of its requirement. The country currently has a refining capacity of around 250 million tonnes per annum (MTPA). Plans are afoot to scale it up to around 450 MTPA over the next few years as India’s oil demand is expected to be on the ascent for the foreseeable future. As per a projection by the International Energy Agency, India’s oil demand could rise from the 4.7 million barrels per day (bpd) seen in 2021 to 6.7 million bpd by 2030 and 7.4 million bpd by 2040.

On an annual basis, petroleum product consumption in the financial year 2022-23 was the highest ever at 222.30 million tonnes. India consumed 85.90 million tonnes of diesel in 2022-23, while petrol consumption was 34.98 million tonnes. As per a forecast by the PPAC, the country’s petroleum product consumption will be even higher — at 233.81 million tonnes — for the current financial year. As per PPAC’s projections, diesel consumption is expected to rise to 90.56 million tonnes, and petrol consumption is seen at 37.80 million tonnes for 2023-24.

An analysis of historical data shows that the previous record for consumption of petroleum products was 214.13 million tonnes in 2019-20. Demand took a hit in 2020-21 due to the pandemic, and posted a modest recovery in 2021-22.