Steep Decrease in the Petroleum Demand in India in April-December

Steep Decrease in the Petroleum Demand in India in April-December

India’s petroleum consumption has decreased moderately from 5.4% to 9.65% in the first nine months of the current fiscal year. In addition, there was a moderation in the consumption growth of diesel, bitumen and naphtha excluding the petcoke volumes.

Steep Decrease in the Petroleum Demand in India in April-December

The petroleum consumption growth was steady at 8.8% for the nine months of FY17, which is lower as compared to 11.6% in FY16. The petcoke volumes showed a 40% growth and an 11% growth in gasoline, aviation turbine fuel and LPG. This reduction in the petroleum consumption in the last few years is evident in public sector undertakings.

According to Kotak Institutional Securities, the demand for autofuels in the country reduced moderately along with moderate decrease of about 3.7% in the diesel consumption growth compared to the 7.5% growth in the last fiscal year. There was a moderate growth by 11.2% for gasoline and petroleum lower than 14.5% growth of FY2016. The kerosene demand also reduced drastically by 17% during April–December compared to the last fiscal year. In short, the PSUs’ share of volumes has declined which has led to the loss of shares for autofuels and rising import.

The oil marketers’ shares and domestic sales volumes have reduced dramatically in the past few years in case of domestic petroleum consumption along with diesel and increase in the imports of petcoke fuels by the trade channels or consuming industries. The growth in the petcoke remained strong at 40% compared to the 33% growth last year due to the increasing off-take by aluminum smelters and cement plants.

The oil marketing companies hardly import petroleum fuels for sale in the domestic market. On the basis of the state run OMCs, the market shares of Indian Oil Corp. were given preference over Bharat Petroleum Corp. and Hindustan Petroleum Corp. due to the economic drive and progress in the Paradip Refinery contribution and low-cost value.

Be the first to comment

Leave a Reply

Your email address will not be published.