According to figures released on Thursday, India’s gasoline consumption reached its highest level in at least 24 years in February, with industrial activity in Asia’s third largest economy bolstered by cheap Russian oil.
Fuel consumption, a proxy for oil demand, increased by more than 5% in February to 4.82 million barrels per day (18.5 million tonnes), marking the 15th straight year-on-year increase, according to statistics.
Demand was the greatest since 1998, according to statistics published by the Indian Energy Ministry’s Petroleum Planning and Analysis Cell (PPAC).
According to Viktor Katona, chief crude analyst at Kpler, the strength reflects a mix of lucrative refining from record Russian crude imports in February, 100% utilization for primary distillation throughout India, and still-robust domestic demand.
Katona expects March demand at 5.17 million barrels per day (bpd), with a seasonal monsoon-driven slowdown bringing it down to 5 million bpd in April-May.
In February, gasoline sales increased 8.9% year on year to 2.8 million metric tons, while diesel usage increased 7.5% to 6.98 million metric tons.
According to the figures, sales of jet fuel increased by more than 43 percent to 0.62 million metric tons.
“For 2023, jet fuel is expected to have the highest demand growth rate, followed by gasoline and then diesel/gas oil,” said Alan Gelder, VP Refining, Chemicals, and Oil Markets at Wood Mackenzie.
Although overall quantities of gasoline (motor spirit) and diesel (HSD) declined in February compared to January, they increased significantly on a daily basis since February is a short month, according to Gelder.
Sales of cooking gas, often known as liquefied petroleum gas (LPG), fell 0.1% to 2.39 million metric tons.
Bitumen sales increased 21.5% month over month, while fuel oil use decreased slightly more than 5% in February compared to January.