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Crude story: Oil demand rises 1.8% during April-December

“Severe winters in northern India and agitations in some states have disrupted normal economic activities,” the oil ministry’s monthly consumption review report said on December consumption. Sharp drop in the sale of diesel-fuelled vehicles, extended rain and preference for petrol vehicles weighed on diesel demand during the financial year, according to the report.

, ET Bureau|
Last Updated: Jan 23, 2020, 07.21 AM IST
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ONGC’s oil production fell 3.4% to 14.3 million metric tonnes.
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NEW DELHI: India’s oil demand rose 1.8% in the first nine months of the current fiscal, slower than 2.7% in the year-ago period. Dependence on oil imports also rose as domestic production fell 5.8% in the same period.

Diesel sales, which makes up 40% of all oil demand in the country, rose barely 0.8% in the nine months to December. Diesel sales dropped 0.7% in December from a year ago.

“Severe winters in northern India and agitations in some states have disrupted normal economic activities,” the oil ministry’s monthly consumption review report said on December consumption. Sharp drop in the sale of diesel-fuelled vehicles, extended rain and preference for petrol vehicles weighed on diesel demand during the financial year, according to the report.

Petrol, however, roared at 8.4% due to people’s preference for petrol-driven vehicles and better rural connectivity, the report said. In December, petrol growth slowed to 3.2%.

Slowing economy has decelerated consumption of petrol, diesel and various industrial fuels in recent months. India’s economy is expected to grow at 5% this financial year.

Massive expansion of cooking gas customers in recent years, to more than 95% of homes, has kept consumption of liquefied petroleum gas (LPG) high at 7.6% this year. In December, the demand for LPG grew 9%. Demand dropped 1.9% for jet fuel as the demise of Jet Airways limited growth in air traffic. Demand for bitumen, used mainly for building roads, was unchanged in nine months to December. It dropped 8.4% in December. “Road construction projects and other infrastructure activities lost pace due to severe winter in the northern states and agitation in some states,” the report said.
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India’s crude oil production fell 5.8% to 24.4 million metric tonnes in the first nine months of 2019-20, expanding country’s import dependence for crude to 84.9% from 83.5% a year ago.

ONGC’s oil production fell 3.4% to 14.3 million metric tonnes. Oil India’s fell 4% while private players’ dropped 12.3%.

Ageing fields and lack of any major discovery in recent years have contributed to India’s oil production decline.

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