India Oil Market (May Report Summary)

Oil products demand in India cooled a bit in April as it averaged 5.3 mmbd (19.85 MMT), 3% lower on monthly basis. However, on absolute basis, this demand figure was still strong as it was 8% higher on yearly basis.

India’s latest manufacturing PMI index for April came at a healthy level of 58.8 led by strong demand for goods prompting firms to ramp up purchases of raw materials at a near-record pace. Higher costs of raw materials and labour led to a modest rise in input costs, but inflation remains below the historical average. Moreover, firms were in position to pass these increases onto consumers amid resilient demand, resulting in improved firm margins.

Demand for each major product was healthy in April (except for bitumen) compared to the previous year. Ongoing election season is the key driver of products demand at present especially of gasoline as demand for travel has increased for campaigning and voting. Similarly, demand of cooking fuel, LPG, has also picked-up during the election season.

Crude imports by Indian refiners are also going strong as they match robust crude runs in the country. During March, Indian refiners processed close to 5.5 mmbd of crude.


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