Consumption of fuel, a proxy for oil demand, rose by more than 5% to 4.82 million barrels per day (18.5 million tonnes) in February, its 15th consecutive year-on-year rise, data showed.
Demand was the highest recorded in data compiled by the Indian Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC) going back to 1998.
The strength highlights a combination of profitable refining from record Russian crude imports in February, total utilization for primary distillation across India and still-robust domestic consumption, said Viktor Katona, lead crude analyst at Kpler.
Katona forecasts demand in March at 5.17 million barrels per day (bpd) and then the seasonal monsoon-driven slowdown will lead to it to drop to 5 million bpd in April-May.
Sales of gasoline, or petrol, rose 8.9% year-on-year to 2.8 million tonnes in February, while diesel consumption climbed 7.5% to 6.98 million tonnes.
Sales of jet fuel jumped more than 43% to 0.62 million tonnes, the data showed. “For 2023, the strongest demand growth rate is projected to be in jet fuel, followed by gasoline and then diesel/gas oil,” said Alan Gelder, VP Refining, Chemicals and Oil Markets at Wood Mackenzie.
While fuel sales data showed total volumes of both gasoline (motor spirit) and diesel (HSD) fell in February relative to January, they grew strongly on a daily consumption basis as February is a short month, Gelder noted.
Cooking gas, or liquefied petroleum gas (LPG), sales slipped by 0.1% to 2.39 million tonnes.
Sales of bitumen, which is used for building roads, jumped 21.5% month-on-month, while fuel oil use declined slightly more than 5% in February, compared with January.