After a modest rise this year, India’s oil demand is expected to decline next year, said a report by S&P Global Commodity Insights. This comes after the World Bank cut its FY23 real gross domestic product growth forecast for India to 6.5%, from 7.5% estimated earlier, in the backdrop of the Russia-Ukraine war.

“Overall, India’s oil demand is expected to grow by 300,000 b/d in 2022, before easing to a 230,000-b/d growth in 2023,” the report said.

India’s September oil product demand was a flat month-on-month but rose on year by 334,000 b/d (barrels per day) on a weak base, driven by gasoil and gasoline consumption, which were up by 179,000 b/d and 65,000 b/d, respectively.

Modest growth was also seen for other products such as LPG, kerosene/jet fuel, fuel oil and minor products, except naphtha which declined by 21,000 b/d, the report added.

“Indicators of mobility remained robust in early October at about 24% higher than pre-pandemic levels and 0.9% over September’s levels, based on Google data. As per AirNav Radar Box, India’s domestic flight travel in early October was 7% below pre-COVID-19 levels, improved by 3 percentage points from September,” the report said.

International travel was down 16% from pre-pandemic levels in early October, unchanged from levels in seen September.

Meanwhile, India’s retail inflation rose to 7% in August from 6.7% in July and is likely to trend higher in September due to higher food prices. The Reserve Bank of India (RBI) raised policy rates by 50 basis points on September 30 in its continued efforts to tame inflation and control currency depreciation.
Source: Livemint