India’s fuel demand jumped by 5% in March compared to a year earlier, official data showed on Monday, as the world’s third-largest crude oil importer continues to see consumption growing.
Indian fuel consumption stood at 20.5 million tons last month, according to data from India’s Oil Ministry cited by Reuters.
Demand for both diesel and gasoline rose in March compared to both March last year and February this year, the data showed. Gasoline demand jumped by 6.8% year-on-year.
In February, Indian fuel demand was estimated to have jumped to the highest level in at least 24 years, and refiners in India raised crude throughput by 2% in February compared to January.
Indian refiners processed 20.85 million tons of crude in February. In barrel-per-day terms, the throughput was at 5.46 million bpd, the highest in bpd terms in Reuters records dating back to 2009.
Fuel consumption in India is expected to rise by 4.7% in the fiscal year between April 2023 and March 2024, estimates by the Indian Ministry of Petroleum and natural gas showed earlier this year. India's gasoline demand is forecast to increase by 7.1% over the next fiscal year, while gasoil demand is expected to rise by 4.2%, according to the projections.
India's robust fuel demand coincides with record-high crude oil imports from Russia, with Indian refineries snapping up cheaper Russian crude.
Russia's largest oil firm, state-controlled Rosneft, signed last month a term agreement with Indian Oil Corporation to raise the supply of Russian crude to India significantly.
From a negligible buyer of Russia's oil before the Russian invasion of Ukraine, India has become a key export market for Moscow and is importing record volumes of Russian crude. In February, Russia remained India's top oil supplier for a fifth consecutive month.
India is not abiding by the G7 price cap as it seeks opportunistic purchases of cheap crude, and it doesn't intend to.
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By Charles Kennedy for Oilprice.com
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