Fitch Ratings expects India’s petroleum product demand to grow by mid-single digits in the medium term, supported by our forecast that India’s GDP will grow by 6%-7% in the next few years, the government’s increasing spending on infrastructure and a pick-up in industrial activity.

We expect the Indian oil marketing companies’ marketing segment to turn profitable from the financial year ending March 2024 (FY24) as crude oil prices fall to Fitch’s assumption of USD78.8 per barrel, following large losses in FY23 due to high crude prices and unchanged retail fuel prices.

We expect refining margins to moderate in FY24 from the record high in FY23 because of easing in tight industry conditions. However, we expect upstream producers’ cash flow generation to be robust, because crude oil prices should remain high, despite some decline from FY23’s highs.

We expect capex intensity to stay high for most of the Fitch-rated Indian issuers in the oil and gas sector.
Source: Fitch Ratings