India's fuel consumption jumped by 5.7% in February compared to the same month of 2023, data from the Ministry of Petroleum and Natural Gas showed on Thursday.
Total fuel consumption in the world's third-largest crude oil importer rose to nearly 5 million barrels per day (bpd), or over 19.7 million metric tons, last month, per data from the ministry's Petroleum Planning and Analysis Cell (PPAC) published today.
That's a 5.7% yearly increase and a rise of 5.1% on a per-day basis compared to January, when consumption was higher overall compared to February, but estimated at 4.74 million bpd by Reuters, due to the higher number of days in the month of January.
Sales of diesel, the most widely used fuel in India, jumped by more than 6% in February 2024 compared to both February 2023 and on a daily basis comparison with January 2024.
High factory activity and increased demand for trucks drove the higher diesel consumption in India last month.
The country's diesel demand is all but certain to hit a new record high later this year, exceeding 2 million bpd for the first time ever in June, Viktor Katona, lead crude analyst at Kpler, told Reuters.
Earlier this year, India's petroleum ministry estimated that India's fuel demand would continue growing and increase by 2.7% in the 2024-2025 fiscal year beginning on April 1. Gasoline consumption in India is set to increase by 5.4% and demand for diesel - the top-selling fuel in the world's third-largest crude oil importer - is expected to grow by 2.7% in 2024-2025, according to the government data.
Before the end of this decade, India is set to become the single biggest driver of global oil demand, replacing China, analysts and forecasters say.
India's economy has grown at a robust pace over the past year. Meanwhile, growth in other major economies-including China-has sputtered. High GDP growth, industrialization, urbanization, and a rising number of middle class in India are all expected to shift the key oil demand growth driver from China onto India.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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Comments
Also in 2023 an estimated 20% of global oil trade was settled in currencies other than the dollar. With China, Russia, India, Venezuela and Iran moving away from the dollar, this figure is expected to rise to 34%% in 2024 meaning that the dollar will lose another 14% share of global traded oil .
And once the Gulf Cooperation Council (GCC) countries and Iraq start accepting the petro-yuan and the rupee more freely, the petrodollar could lose another 20% of its share making total loss 60% by 2030.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert