India’s fuel demand rises 5.7% YoY in February on strong factory output

Total consumption, a proxy for oil demand, totalled 19.72 million metric tons (4.98 million barrels per day) in February, up from 18.66 million tons last year, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed.

India's fuel consumption rose 5.7 per cent year-on-year in February (File Image)

India’s fuel consumption rose 5.7 per cent year-on-year (YoY) in February, government data showed on Thursday, helped by strong factory activity in the world’s third-biggest oil importer and consumer. Total consumption, a proxy for oil demand, totalled 19.72 million metric tons (4.98 million barrels per day) in February, up from 18.66 million tons last year, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed.

Demand was up about 5.1 per cent on a daily basis from the 4.74 mbpd (20.04 million metric tons) consumed in January. “The increase month-on-month in fuel consumption is yet another tour de force of the Indian economy, a sign of how strong demand growth has been in recent months,” said Viktor Katona, lead crude analyst at Kpler.

“Diesel demand is almost guaranteed to hit a new record this year (in June), surpassing the 2 mbpd mark for the first time in history.” Sales of diesel, mainly used by trucks and commercially run passenger vehicles, rose by 6.2 per cent year-on-year to 7.44 million tons in February.

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They were up about 6.8 per cent month-on-month to 1.88 mbpd on a per-day basis. India’s manufacturing industry enjoyed robust growth in February with activity expanding at its fastest pace in five months, led by accelerated global demand and lower inflationary pressures, a private survey last week showed. Sales of gasoline in February rose 8.9 per cent from the previous year to 3.02 million tons.

Meanwhile, Indian automakers continued to report a steady rise in sales in February, helped by demand for two-wheelers and utility vehicles, monthly sales data from companies showed last week. Sales of bitumen, used for making roads, rose by 3.7 per cent annually, while demand jumped 14.4 per cent on a monthly basis.

“Bitumen was the quickest growing product category…a testament to the Modi government’s investment spree in the months leading up to the election,” Katona said. Cooking gas, or liquefied petroleum gas sales rose by 8.5 per cent to 2.59 million tons, while naphtha sales jumped by 11.7 per cent to about 1.19 million tons, compared with last February, the data showed. Fuel oil use decreased by 11.2 per cent year-on-year in February.