Fuel consumption in India jumped by 6.1% in April compared to the same month last year, official data showed on Tuesday, as demand in the world’s third-largest crude oil importer continues to grow this year.
Total fuel consumption, often used as a proxy for oil demand, increased to 19.858 million metric tons last month, according to data released by the Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC).
India’s fuel demand has been strong over the past year, reaching a record-high in the financial year 2023/2024 ended in March.
Fuel sales inched down in March 2024, but rebounded year-on-year in April, according to the latest official data.
Earlier this year, fuel consumption jumped by 5.7% in February compared to the same month of 2023.
High factory activity and increased demand for trucks drove the higher diesel consumption in India in February.
The country’s diesel demand is all but certain to hit a new record high later this year, exceeding 2 million bpd for the first time ever in June, Viktor Katona, lead crude analyst at Kpler, told Reuters.
India’s petroleum ministry has estimated that India’s fuel demand will continue growing and increase by 2.7% in the 2024-2025 fiscal year beginning on April 1. Gasoline consumption in India is set to increase by 5.4% and demand for diesel – the top-selling fuel in the world’s third-largest crude oil importer – is expected to grow by 2.7% in 2024-2025, according to the government data.
Before the end of this decade, India is set to become the single biggest driver of global oil demand, replacing China, analysts and forecasters say.
India’s economy has grown at a robust pace over the past year. Meanwhile, growth in other major economies—including China—has sputtered. High GDP growth, industrialization, urbanization, and a rising number of middle class in India are all expected to shift the key oil demand growth driver from China onto India.
By Tsvetana Paraskova for Oilprice.com