The strong volume growth seen in India’s petroleum consumption over the last two years has slowed. Given that India is the world’s fourth-largest petroleum consumer this should soon start reflecting in global oil consumption growth. However, the problems related to subsidies back home are not easing due to a weak rupee.
Domestic consumption data released by the Petroleum Planning and Analysis Cell shows the growth in consumption of petroleum products, which was 5% in FY12 and 4.9% in FY13, slumped to 1.6% in the April-June 2013 quarter. The data shows that only decontrolled products such as petrol, aviation fuel contributed to volume growth.
“Excluding minor decontrolled products (Petcoke & others representing 11.1% of total in quantity terms), which are insignificant in value terms, the growth in consumption fell 3.1%,” according to the analysis cell.
“There has, no doubt, been a slowdown in domestic petroleum consumption, particularly starting this fiscal,” N Srikumar, executive director, Indian Oil conceded. A number of factors are at play, including overall slowdown in economic activities, according to him.
Diesel consumption grew 6.7% in volumes last fiscal due to a spurt in diesel vehicles, power shortages and even a switch to diesel from industrial fuels on account of its artificially lower prices. Diesel volumes have tapered off from April this year as these factors are no longer in play. Similarly, kerosene consumption volumes are steadily declining as some states are moving towards a ‘No-kerosene’ status and consequently promoting the use of LPG as an alternative. “In Aviation Turbine Fuel, too, the volumes are muted due to the exiting of airlines like Kingfisher and due to route and aircraft rationalisation by airlines,” he says.
Given that India is a large petroleum consumer, a slowdown in domestic consumption is bound to impact global aggregates. “...oil demand growth has been revised down by 11,000 bpd in 2013... due to weaker oil demand from India and Indonesia — driven by a rather lacklustre economic data in India,” said a recent monthly report from OPEC.
India’s growth projections for FY14 is now being revised. In July, the IMF cut India’s growth forecast to 5.6% from 5.8%, while RBI cut its growth forecast to 5.5% from 5.6%. For the April-June 2013 quarter, economic growth is expected to have touched a low of 4.8%. This is bound to impact fuel consumption across the board. “Going forward, unless the economy picks up and overall sentiments improve, petroleum product consumption is not expected to ramp up in a hurry,” says IOC’s Srikumar.
Domestic consumption data released by the Petroleum Planning and Analysis Cell shows the growth in consumption of petroleum products, which was 5% in FY12 and 4.9% in FY13, slumped to 1.6% in the April-June 2013 quarter. The data shows that only decontrolled products such as petrol, aviation fuel contributed to volume growth.
“Excluding minor decontrolled products (Petcoke & others representing 11.1% of total in quantity terms), which are insignificant in value terms, the growth in consumption fell 3.1%,” according to the analysis cell.
“There has, no doubt, been a slowdown in domestic petroleum consumption, particularly starting this fiscal,” N Srikumar, executive director, Indian Oil conceded. A number of factors are at play, including overall slowdown in economic activities, according to him.
Diesel consumption grew 6.7% in volumes last fiscal due to a spurt in diesel vehicles, power shortages and even a switch to diesel from industrial fuels on account of its artificially lower prices. Diesel volumes have tapered off from April this year as these factors are no longer in play. Similarly, kerosene consumption volumes are steadily declining as some states are moving towards a ‘No-kerosene’ status and consequently promoting the use of LPG as an alternative. “In Aviation Turbine Fuel, too, the volumes are muted due to the exiting of airlines like Kingfisher and due to route and aircraft rationalisation by airlines,” he says.
Given that India is a large petroleum consumer, a slowdown in domestic consumption is bound to impact global aggregates. “...oil demand growth has been revised down by 11,000 bpd in 2013... due to weaker oil demand from India and Indonesia — driven by a rather lacklustre economic data in India,” said a recent monthly report from OPEC.
India’s growth projections for FY14 is now being revised. In July, the IMF cut India’s growth forecast to 5.6% from 5.8%, while RBI cut its growth forecast to 5.5% from 5.6%. For the April-June 2013 quarter, economic growth is expected to have touched a low of 4.8%. This is bound to impact fuel consumption across the board. “Going forward, unless the economy picks up and overall sentiments improve, petroleum product consumption is not expected to ramp up in a hurry,” says IOC’s Srikumar.
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