India’s petroleum products consumption rose by 8% in November 2022 to 18.48 million tonnes (mnt) compared to 17.05 mnt in the same month last year.
The total consumption of all petroleum products includes domestic sales by all oil companies, direct imports and sales by SEZ units in DTA.
Demand for petroleum products improved in November on a lower base of the previous year because of the second wave of Covid-19. The road transportation segment, which accounts for over 50% of domestic petroleum product consumption, witnessed healthy recovery.
Amongst the major products, the maximum growth is observed in Aviation Fuel (ATF) by 24% in November over the same month last year, followed by petcoke by 23%.
The consumption of furnace oil (FO) and low sulphur heavy stock (LSHS) increased by 12% y-o-y in the month. Furnace oil is used for electricity generation.
Petroleum products consumption in Apr-Nov’22
On a cumulative basis, petroleum products consumption in April-November 2022 increased by 15.5 mnt to 145.32 mnt as against 129.82 mnt in the same period last year, registering a 12% growth y-o-y.
Notably, the top five products by consumption during the period in descending orders are high speed diesel (HSD), motor spirit (MS), liquified petroleum gas (LPG), pet coke and naphtha. These five products have contributed approximately 75% of total petroleum products consumption.
HSD is used as transportation fuel in various sectors like railways, buses, industries, mining etc. Motor Spirit (Petrol) is used in private transportation like car, two wheelers etc. and LPG is used mainly as domestic cooking and also in some industrial applications.
ATF – which is used as fuel by most of the aircrafts – recorded the highest growth of 57% in the April-November period. The consumption has consistently increased due to the relaxation in air lines restrictions for both domestic and international destinations after Covid-19. The consumption is expected to further increase in the near future.
The maximum negative growth was observed in superior kerosene oil followed by light diesel oil. The consumption of naphtha fell by 11% due to reduced usage in power generation/fertilizers making.
Outlook
In 2023, demand for petroleum products is expected to be higher than the pre-pandemic levels. The consumption growth of motor spirit (petrol) is likely to remain moderate because of increasing fuel efficiency and deepening penetration in the two-wheeler segment.
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