Growth in India?s oil demand is estimated at 0.1 mb/d for 2010. Although agriculture and transport sectors are expected to be strong in India next year, the partial removal of price subsidies and other governmental policies are downside risks for oil demand growth in 2010.
According to the oil market report for August released by Opec, there was good demand for oil in June due to not only better economic activities but also due to start of the agricultural season. The country?s oil demand grew by more than 13.6% in June y-o-y versus 0.6% last year in May. India?s oil demand, which has been performing moderately since the start of the year, picked up pace in June . Gasoline consumption alone grew by a record 37.5% adding another 85 tb/d to the country?s oil demand pool. Diesel consumption growth was more than double that of gasoline, reaching 0.2 mb/d in June y-o-y to average 1.2 mb/d. Agricultural and industrial usage were the reasons behind this strong growth. The demand is anticipated to grow by 4% this year.
Meanwhile, India?s crude oil imports declined in June by about 1,25,000 b/d or 4% compared to the record-high monthly imports in the previous month, to average 2.72 mb/d. Crude imports for June were 127,000 b/d higher compared to a year earlier. India?s crude oil imports during the first half of 2009 averaged 2.61 mb/d, about 53,000 b/d, or 2% higher compared to the same period the year before. India?s product imports also declined in June by 120,000 b/d or 34% compared to the previous month to average about 0.24 mb/d, 38% lower compared to June 2008. Apart from naphtha, imports of all major products were lower in June compared to the previous month.
For the first time since October 2008, there were no gas oil imports in June, down from 152,000 b/d a month earlier and from 35,000 b/d a year ago. Gasoline imports were at 7,000 b/d in June compared to 10,000 b/d the previous month and 6,000 b/d the year before. LPG imports in June averaged about 30,000 b/d, down from 48,000 b/d the previous month, but up from 19,000 b/d in June 2008. On the export side, India?s total product exports of 447,000 b/d in June were 27,000 b/d or 6% lower compared to the previous month and 41% lower compared to a year earlier. Fuel oil exports in June averaged 69,000 b/d, up from 52,000 b/d the previous month, but down from 91,000 b/d a year earlier. Jet fuel exports were at 68,000 b/d in June, up from 61,000 b/d the previous month.
For the first half of 2009, India exported an average of 0.58 mb/d of products, down by 179,000 b/d, or 23% compared to the same period the year before. As a result, India?s net oil imports in June averaged 2.51 mb/d, displaying a decline of 8%, or 218,000 b/d compared to the previous month and 13% compared to June 2008.