India's October oil demand rises 1.6% MoM; 2023 annual growth revised: S&P Global
Nov 08, 2023
New Delhi [India], November 8 : Demand for oil grew by 1.6 per cent month over month in October in India and 4 per cent year over year as mobility remained strong amid festivities, according to S&P Global Commodity Insights.
Jet fuel demand rose to 177,00 barrels per pay in October, the highest consumption recorded since March 2020 when the world grappled with COVID-19.
Diesel consumption strongly rebounded during October and was higher by 14 per cent on the month and up by 9.3 per cent on the year after a lull in the July-September quarter.
Movement of trucks gained momentum last month fulfilling the need to transport goods along the supply chain as sellers stock up during festivals to meet the rising demand, said S&P Global Commodity Insights.
Moreover, consumption also increased from the agriculture sector as October is typically the harvesting period for paddy crops while factory activities gained momentum to meet the rising consumer demand. Gasoil demand is expected to be close to 7 per cent above pre-COVID-19 levels this year.
Himi Srivastava, Analyst - South Asia Oil Markets, S&P Global Commodity Insights said, "India's gasoline demand saw a small decrease in October to 864,000 b/d from 869,000 b/d in September due to an extra day in October, however, the overall consumption was 3 per cent higher in absolute terms as people flock to buy vehicles during the auspicious days of Navratri last month. India's gasoline demand rebounded to above pre-COVID-19 levels in 2021 and is expected to be some 22 per cent higher than 2019's level in 2023."
In October, total Jet fuel and kerosene demand increased to 185,000 b/d, up by 1.8 per cent from last month as air travel continued at a good pace.
"International travel was also up in October over September by 1 per cent and 20 per cent above last year. The flight departures paint a positive picture due to the festive travel demand." Himi Srivastava added.
Overall, India's oil demand is expected to grow by 258,000 barrels per day in 2023, revised higher by 9,000 bpd from the last update citing strong diesel sales.
Middle distillates, gasoil, and kerosene/jet fuel combined will account for more than 50 per cent of the growth, with gasoline and naphtha together contributing 27 per cent of the growth. India's oil demand in 2023 is expected to be 7 per cent above 2019, before rising to about 11 per cent in 2024.
