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The COVID-19 pandemic has already brought a lifestyle change in the world’s third-largest oil importer, India, where a growing number of people now prefer commuting with their own vehicles, which will likely lead to increased crude imports with higher demand for fuels, analysts told Arabian Business.
India was under lockdown for most of April and May because of the coronavirus pandemic, and now people seem to be avoiding commuting on public transportation where possible. The use of passenger cars and two-wheelers in India is only set to grow, which analysts expect will translate into higher demand for refined oil products and consequently, higher crude oil imports.
“Already we are witnessing a surge in the use of both 2-wheelers and 4-wheelers on the Indian roads across cities and towns as people have been shunning use of public transport to commute,” independent energy consultant Tsunduru Muralidhar told Arabian Business’ James Mathew.
The higher use of passenger vehicles and motorcycles, coupled with recovering economic activities are set to increase India’s oil demand in the coming quarters, Kalpana Jain, energy sector analyst with Deloitte India, told Arabian Business.
At the end of June, Indian Oil Minister Dharmendra Pradhan said that fuel demand in India was set to rebound to pre-crisis levels by the end of September.
Yet, India’s crude oil imports slumped in June to their lowest levels since 2011, with oil refiners buying less crude because of maintenance and weaker demand, according to data from industry sources reported by Reuters.
Weakening demand in India may be a concern for the oil markets. Refiners are now cutting processing rates because fuel demand – up from the lows in April and May – has slowed this month as fuel prices are higher and parts of India are again under local lockdowns, while the monsoon rain season is also stalling economic activity and transport, officials at refineries told Reuters this week.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.