India’s oil demand bounced back in April after falling for three consecutive months, recovering from the impact of the country’s move to withdraw high-value notes.
Fuel consumption rose 3.3 percent to 16.79 million tons in April, according to the Oil Ministry’s Petroleum Planning and Analysis Cell. Diesel use, which accounts for about 40 percent of the total fuel demand in India, increased 2.8 percent to 6.96 million tons and gasoline consumption rose 4.5 percent to 2.09 million tons.
Stronger demand will increase India’s crude oil imports year-over-year in April and May, BMI analysts said in a note emailed on May 9. “The return of Indian consumption growth over the remainder of 2017 will help support global oil demand growth over the summer,” they said.
India imports more than 80 percent of its crude requirement and the International Energy Agency expects it to be the fastest-growing consumer through 2040. Oil demand has been rising rapidly in the world’s fastest-growing major economy, which is expected to expand 7.4 percent in the year through March, according to Bloomberg estimates.
“Fuel consumption is robust,” Indian Oil Corp. Chairman B. Ashok said in New Delhi on Thursday. He expects overall oil consumption to rise at least 4 percent to 5 percent in the year to March, driven by growth in the use of gasoline, liquefied petroleum gas and aviation fuel.
India’s oil consumption plunged 5.9 percent in January, the most in 13 years, after Prime Minister Narendra Modi’s shock clampdown on high-value currency notes in November. Demand then fell by 3.1 percent in February, followed by a 0.7 percent fall in March.