India’s oil demand surged to 4.76 million bpd in 2021 from 4.51 million barrels per day in 2020, posting 5.61% growth
India’s oil demand surged to 4.76 million bpd in 2021 from 4.51 million barrels per day in 2020, posting 5.61% growth
India’s oil demand is expected to rise 8.2% to 5.15 million barrels per day in 2022 as the economy continues to recover from the devastation caused by the pandemic.
The Organization of the Petroleum Exporting Countries (OPEC), in its latest monthly oil market report, forecast that the world’s third-largest energy consumer will increase by 0.39 million barrels per day (bpd) in crude oil demand in 2022.
Also read |India’s oil production continues to decline
India’s oil demand surged to 4.76 million bpd in 2021 from 4.51 million barrels per day in 2020, posting a 5.61% growth.
However, this was below pre-pandemic levels. Oil demand in 2018 was 4.98 million bpd and rose to 4.99 million bpd the following year before the pandemic hit.
“Given the expected strong economic growth of 7.2% in 2022 and the expected rapid containment of Omicron in the near term, oil demand is expected to recover,” the OPEC report said.
Mobility has continued to improve as average driving activity has increased in India. Oil demand has risen this year as states eased COVID-19 restrictions in line with the fall in new infections.
“Gasoline and diesel should be particularly favored by the expected increase in gross domestic product and the already recovering mobility and thus also driving activity,” it said.
Similarly, in line with a forecast of a robust economy in 2022, the industrial sector will support demand for diesel, LPG and naphtha.
Demand for jet kerosene is expected to grow more slowly in 2022 due to travel challenges, particularly in the business sphere, it said. “Nevertheless, India is forecast to grow by 0.4 million barrels per day in 2022.”
OPEC forecast is in line with government estimates for fuel demand growth. India’s fuel demand is expected to grow 5.5 percent in the fiscal year beginning April 1, according to the Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC).
Fuel consumption in 2022-23 is expected to increase to 214.5 million tonnes (4.3 million bpd), from 203.2 million tonnes of expected sales in the current fiscal year ending March 2022.
While OPEC forecasts relate to crude oil demand, the PPAC forecast relates to fuel demand. Crude oil is converted into fuels such as gasoline and diesel in refineries, and not all petroleum products produced are consumed in the country. A significant amount of petroleum products is also exported, leading to discrepancies between crude oil and fuel demand estimates.
“India’s crude oil imports averaged 4.5 million bpd in January, down about 3 percent from the previous month’s strong level. ‘ said the OPEC report.
Imports account for 85% of India’s oil needs.
“In terms of crude oil imports by origin, the latest data for December shows that Iraq remains the leader with a 27% share.
“Saudi Arabia was second at around 17%, followed by the United Arab Emirates at around 13%, with the latter seeing a jump in volumes. The US also saw a strong increase, rising to fourth place at 9%,” she added.
According to the PPAC, India’s fuel demand in the current fiscal year will exceed pre-pandemic sales figures. In 2019-20 India had consumed 214.1 million tons of petroleum products such as gasoline, diesel and LPG.
Demand for petroleum products increased by 4.2% in the first 10 months of the current fiscal year, which started in April 2021. Fuel consumption from April 2021 to January 2022 was 165.7 million tons.
India consumed 194.3 million tonnes of oil produced in 2020-21, the year a pandemic-related lockdown crippled economy and mobility, and 214.1 million tonnes in 2019-20.
