India’s oil demand up by 8.2 per cent in January: S&P Global Commodity

India’s rising oil demand: India's appetite for oil is surging, marking an impressive 8.2 YoY growth in January, a trend expected to persist with an anticipated additional 200,000 barrels per day (b/d) in 2024, the S&P Global Commodity Insights said. 

S&P Global Commodity Insights also underscored the role of gasoil and gasoline, each projected to contribute 33 per cent and 31.5 per cent to this growth.

January's spike was led by LPG and gasoline, responding to winter heating needs and increased mobility post-holidays. However, jet fuel faced headwinds as fog-induced flight disruptions impacted consumption.

Diesel consumption, up by 3.7 per cent annually, faced a setback of 43,000 b/d due to dense fog in northern India, hindering highway mobility and slowing construction and industrial activities. Gasoil demand is predicted to remain robust in Q1, foreseeing a yearly growth of 50,000 b/d.

Gasoline demand, reflecting the return to work post-holidays and the adoption of hybrid work models, reached 853,000 b/d in January. With robust sales of gasoline-run vehicles, gasoline demand is expected to witness a growth of 65,000 b/d in Q1 2024, contributing to an overall annual growth of 200,000 b/d compared to 2019 levels.

Jet fuel and kerosene demand, totaling 192,000 b/d in January, experienced a slight moderation due to fog-related flight disruptions but still posted a 7 per cent YoY increase.

Looking ahead to 2024, the overall oil demand outlook for India remains positive, with a projected growth of 203,000 b/d. 

Gasoil and gasoline are poised to be the primary growth drivers, making up 33 per cent and 31.5 per cent of the share, respectively. Factors such as robust economic growth, a focus on industrial and construction activities, and the impending general elections in 2024 are expected to sustain this upward trajectory.