India's Refinery Throughput Rises After Fuel Demand Hits 24-Year High

• India’s fuel demand climbed to its highest level in at least 24 years in February, pushing refinery throughput higher.
• Indian refiners processed 20.85 million tons of crude in February, the highest in terms of barrels per day since Reuters records began in 2009.
• India's gasoline demand is forecast to increase by 7.1% over the next fiscal year, coinciding with record-high imports of Russian crude.

Record-high fuel demand raised refinery throughput in India by 2% in February from January, according to provisional government data cited by Reuters.

In February, when fuel demand in the world's third-largest crude oil importer hit the highest in at least 24 years, Indian refiners processed 20.85 million tons of crude. 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. 

India's fuel demand jumped by 5% to 4.82 million bpd in February, per oil ministry data quoted by Reuters. This was the highest level the ministry has reported since at least 1998.

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 climb 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.

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.

India will buy the oil it consumes from "wherever we have to" if the economics are beneficial for the country, Indian Oil Minister Hardeep Singh Puri told CNBC earlier this year.

"Today we feel confident that we'll be able to use our market to source from wherever we have to, from wherever we get beneficial terms," the minister said.  

By Charles Kennedy for Oilprice.com

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