India's refined product consumption expanded by 5.2% in 2021, although it remained below the pre-pandemic level seen in 2019, data from the country’s petroleum ministry revealed on Tuesday.
India, the world's third-largest oil consumer, saw refined product consumption climb to slightly under 4.9 million barrels per day (bpd) in 2021, up from 4.65 million bpd in 2020.
Despite this rise, data from the petroleum ministry and projections by Energy Intelligence show that consumption is approximately 200,000 bpd short of the total for 2019.
The spike in COVID-19 infections is projected to dampen consumption in the first quarter of this year, but it is expected to meet or exceed 2019 levels and reach new records in 2022 as the economy rebounds.
- Diesel recovery lagging
As people preferred to drive their own cars rather than take public transportation due to the coronavirus pandemic, gasoline consumption increased by 12.6% last year, surpassing the 2019 figure.
Diesel consumption remained much below that of 2019 with a 7% increase last year, which was inadequate to counteract the 14% decline in 2020.
Several factors stifled diesel sales, including consumers' increased preference for gasoline-powered vehicles, frequent rain, and a slower-than-expected economic recovery.
According to the International Energy Agency, India's oil demand will rise to 5.09 million barrels per day this year, up 4% from the ministry's projection for 2021. However, the country’s oil demand will depend very much on the future course of the pandemic.
The Organization of Petroleum Exporting Countries (OPEC) is more optimistic, forecasting a demand of 5.28 million bpd.
As state oil company Hindustan Petroleum's east coast refinery starts up a 125,000 bpd crude distillation unit in March, Consultancy FGE predicts that refinery runs will increase by 400,000 bpd to 5.2 million bpd in 2022.
Throughput is expected to exceed the 2019 pace by 50,000 barrels per day, according to FGE.
India has started imposing new restrictions in the capital New Delhi as of Tuesday, including the closure of offices, restaurants, and a full lockdown during weekends as the daily COVID-19 cases has surpassed 195,000.
By Sibel Morrow