India's Fuel Demand In February Hits 24-Year High: Report

The data showed consumption of fuel, a proxy for oil demand, rose by more than 5 per cent to 4.82 million barrels per day (18.5 million tonnes) in February, its 15th consecutive year-on-year rise

Sales of gasoline, or petrol, rose 8.9 per cent YoY to 2.8 million tonnes in February, while diesel consumption climbed 7.5 per cent to 6.98 million tonnes.

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Fuel demand in India hits its highest level in at least 24 years in February, citing a data news agency Reuters reported. According to the report, India’s industrial activity is boosted by cheap Russian crude oil.

The data showed consumption of fuel, a proxy for oil demand, rose by more than 5 per cent to 4.82 million barrels per day (18.5 million tonnes) in February, its 15th consecutive year-on-year rise.

Demand was the highest recorded in data compiled by the Indian Oil Ministry's Petroleum Planning and Analysis Cell (PPAC) going back to 1998.

The strength highlights a combination of profitable refining from record Russian crude imports in February, total utilisation for primary distillation across India and still-robust domestic consumption, said Viktor Katona, lead crude analyst at Kpler.

Katona forecasts demand in March at 5.17 million barrels per day (bpd) and then the seasonal monsoon-driven slowdown will lead to it to drop to 5 million bpd in April-May, as reported by Reuters.

Sales of gasoline, or petrol, rose 8.9 per cent year-on-year (YoY) to 2.8 million tonnes in February, while diesel consumption climbed 7.5 per cent to 6.98 million tonnes.

The data showed that sales of jet fuel jumped more than 43 per cent to 0.62 million tonnes.

"For 2023, the strongest demand growth rate is projected to be in jet fuel, followed by gasoline and then diesel/gas oil," said Alan Gelder, VP Refining, Chemicals and Oil Markets at Wood Mackenzie.

While fuel sales data showed total volumes of both gasoline (motor spirit) and diesel (HSD) fell in February relative to January, they grew strongly on a daily consumption basis as February is a short month, Gelder noted.

Cooking gas, or liquefied petroleum gas (LPG), sales slipped by 0.1 per cent to 2.39 million tonnes.

Sales of bitumen, which is used for building roads, jumped 21.5 per cent month-on-month, while fuel oil use declined slightly more than 5 per cent in February, compared with January.