India’s crude oil imports peaked in August as refineries stepped up purchases to meet record domestic fuel consumption.
Indian refiners imported 18.81 million metric tons (about 4.45 million barrels a day) of crude oil during the month, a 9.1 percent increase over last year, according to the oil ministry’s Petroleum Planning & Analysis Cell. That is the highest level in data on the PPAC’s website going back to April 2009.
The South Asian nation of 1.3 billion people, which meets over 80 percent of its crude oil requirements through imports, has emerged as a bright spot for global oil demand as the the fastest economic expansion among major economies spurs increased use of trucks, cars and motorbikes. The International Energy Agency expects India to be the fastest-growing crude consumer in the world through 2040.
“India’s domestic fuel demand has been rising at a scorching pace,” according to Tushar Tarun Bansal, director at Singapore-based Ivy Global Energy. “To meet this strong growth, India’s refinery runs have been on an uptrend, leading to higher imports.”
The nation’s gasoline consumption reached a record in August, surging 25 percent from a year earlier, while demand for diesel rose 13 percent, the fastest pace since March. Virendra Chauhan, an oil analyst at Singapore-based consulting firm Energy Aspects Ltd., expects India’s oil demand to grow by 0.4 million barrels a day this year and by 0.2-0.3 million barrels a day next year.
Indian refiners are racing to add capacity, spending billions of dollars amid rising fuel consumption. State-run Indian Oil Corp., the country’s biggest refiner, aims to increase its capacity by 30 percent, or about 2 million barrels per day, over the next six years by expanding its existing refineries across the country.
The country’s 23 refineries have a total capacity of 230 million tons a year, while total fuel demand was 183.5 million tons during the financial year that ended March 31, according to the oil ministry.
“There has been strong demand — gasoline growth is unprecedented and diesel growth will rise after monsoon,” Sanjiv Singh, director of refineries at Indian Oil, said.