India’s fuel consumption is expected to go up by 4.7 percent between April 2023 and March 2024, according to estimates by the country’s ministry of petroleum and natural gas.
This will be good news for Middle East countries such as Saudi Arabia, the UAE and Iraq which are major crude exporters to the South Asian country – which is the world’s third-largest oil importer.
India’s gasoline demand is also forecast to increase by 7.1 percent over the next fiscal year, while gasoline demand is expected to climb by 4.2 percent, Reuters reported, citing the ministry’s initial estimates.
Demand for all products—except for naphtha—is projected to increase over the 12 months beginning in April, the estimates showed.
India’s fuel demand rebounded strongly in the first half of February, recovering from a drop in January, with sales of diesel and gasoline jumping by double digits so far this month, according to preliminary consumption data released last week.
Sales of diesel, the most used fuel in India, jumped by almost 25 percent year-on-year between February 1 and 15, according to preliminary industry data reported by PTI last week.
More fuel demand is expected
Domestic demand for fuels is expected to rise further later this year as the government considers a cut in fuel tax as part of efforts to bring inflation under control.
Rising fuel demand in India and an expected rebound in Chinese oil demand after the reopening are set to be major bullish factors for the oil markets this year, analysts say.
However, the expected strong demand in China and India could be offset by slowdowns in other economies, especially if the US Federal Reserve continues with interest rate hikes to a higher end-point rate than previously thought.
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