India's fuel demand hits 24-year high in February 

India’s fuel demand in February reached a 24-year high. Industrial activity in the country was also boosted by cheap Russian oil. Consumption of fuel rose by over 5 per cent to 4.82 million barrels per day (18.5 million tonnes) in February, which was the 15th consecutive on-year rise.

Demand was highest in the history of the recorded data compiled by the Indian Oil Ministry's Petroleum Planning and Analysis Cell (PPAC), which was first started in 1998. 

Sales of gasoline, or petrol, rose 8.9 per cent year-on-year to 2.8 million tonnes in February, while diesel consumption climbed 7.5 per cent to 6.98 million tonnes. Sales of jet fuel jumped more than 43 per cent to 0.62 million tonnes, as per the data. Cooking gas, or liquefied petroleum gas (LPG), sales slipped by 0.1 per cent to 2.39 million tonnes.

Sales of bitumen, which is used for building roads, jumped 21.5 per cent on-month, while fuel oil use declined slightly more than 5 per cent in February, compared with January.

Viktor Katona, lead crude analyst at Kpler said that demand in March will be at 5.17 million barrels per day (bpd), and that the seasonal monsoon-driven slowdown will lead it to drop to 5 million bpd in April-May.

Katona said that the increase in consumption highlights a combination of profitable refining from record Russian crude imports in February, total utilisation for primary distillation across India and still-robust domestic consumption. 

Alan Gelder, VP Refining, Chemicals and Oil Markets at Wood Mackenzie expects the strongest demand growth rate in 2023 to be in jet fuel, followed by gasoline and then diesel/gas oil. 

Gelder noted that while fuel sales showed that the total volume of both gasoline and diesel dropped in February from January, it grew strongly on a daily consumption basis as February is a short month. 

(With Reuters inputs)

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