Petroleum Products Consumption in India Up by 4%, Y-o-Y, in 2024
The petroleum planning and analysis cell (PPAC) has released the consumption figures for 2024. Overall, India’s petroleum products consumption registered an increase of 4%, y-o-y in 2024. The strongest increase was seen in aviation turbine fuel (ATF) consumption, posting a growth of 10%, y-o-y, followed by petcoke (9%), gasoline (8%) and LPG (7%).
In line with strong products demand, country’s crude imports were also up by 3%, y-o-y, based on data for Jan-Nov 2024 while refinery runs were up by 1%, y-o-y, over the same period. This was yet another year when India’s overall refinery utilization rate was more than the nameplate capacity as it averaged 103%. This also highlights the fact that despite volatile refinery cracks, India plants were running at more than full capacity (on average) to meet the strong domestic demand.
Despite the growth, India’s petroleum sector did not remain untouched from economic headwinds. This was particularly reflected in relatively slower expansion in gasoil consumption (3%). Economic growth in the country has slowed down in recent months led by several factors including global headwinds, sluggish consumer demand, weak private sector investment and government spending. As per UN World Economic Situation and Prospects report, India’s real GDP grew by 6.9% in 2024, down from 8% in the previous year. The growth rate is expected to further come down in 2025 to average 6.6% and it will be interesting to see how it shapes the petroleum products sector.
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Key Updates from December:
LPG:
Manmohan Singh’s 1991 LPG Reforms: The Turning Point for Adani’s Business Journey
(By Outlook Business, 27 December 2024)
Gautam Adani had often shared key moments from the his entrepreneurial journey that were influenced by 1991 economic reforms. These reforms lowered import tariffs and opened the doors for foreign investors which created a fertile environment for Indian businesses to thrive. By 1991, he established a global trading house in polymers, metals, textiles, and agri-products.
Adopting Auto LPG in Heavy-Duty Trucks Key to Cutting USD1 Trillion Crude Imports Cost
(By Economic Times, 20 May 2024)
The Indian Auto LPG Coalition (IAC) has called for India to adopt LPG for its heavy-duty truck fleet, inspired by a recent initiative by OneEagle, a Belgian logistics company. The Belgian firm, in partnership with addvantage Global, is trialing an Autogas fuel system on its 145 heavy-duty trucks in the Benelux region, using onboard telematics to monitor real-time emissions reductions.
Naphtha:
IOC to Invest US$ 7 Billion in Naphtha Cracker Project in Odisha
(By Reuters, 24 December 2024)
IOC will invest 610 billion rupees ($7 billion) to establish a naphtha cracker project in Paradip. The company is expected to sign an initial agreement with the state government in January, the Odisha chief minister’s office said in a statement. IOC operates a refinery in Paradip with a capacity of 300,000 barrels per day.
Gasoline and Gasoil:
Petrol Will Not Come Under GST, Says Union Petroleum Minister Hardeep Singh Puri
(By Business Today, 30 December 2024)
Union Petroleum Minister Hardeep Singh Puri has ruled out the inclusion of petrol under GST, citing its impact on state revenues and the ongoing fluid economic situation. He, however, indicated that fuel prices might decrease if global crude oil prices stabilise and international turbulence subsides. However, he said, a rise to US$80 per barrel would leave no room for relief.
Fuel Price Cut at Private Outlets Worry State-Run Retailers
(By Hindustan Times, 20 December 2024)
A INR3 per litre “happy hours discount” by private petrol retailers has seen outlets of state-run firms losing up to 50% market share at various locations, said dealers from across India urging their companies to immediately reduce prices. The government deregulated petrol and diesel sales in 2010, allowing private competition in the domestic fuel retail business.
Marketing Margins on Petrol and Diesel to Rise on Muted Oil Prices
(By Times of India, 12 December 2024)
The marketing margins on petrol and diesel have risen to Rs 13.60 per litre on petrol and Rs 10.70 on diesel on the back of muted oil prices and steady returns from refining operations during the third quarter (October-December), as per a report by brokerage Motilal Oswal Financial Services. The current margins reflect a 34% jump over the previous quarter.
Aviation Turbine Fuel (ATF):
Is India Set to Lead the Global Sustainable Aviation Fuel Revolution?
(By 100 Knots, 24 December 2024)
India, the world’s third-largest aviation market, is uniquely positioned to lead in the production of Sustainable Aviation Fuel (SAF). With its rapid aviation growth, surplus biomass resources, and burgeoning ethanol industry, India holds the potential to reshape global decarbonization efforts in the aviation sector.
Flight Tickets May Get Costlier As Oil Companies Raise Aviation Fuel Prices
(By NDTV, 01 December 2024)
IOC will invest 610 billion rupees ($7 billion) to establish a naphtha cracker project in Paradip. The company is expected to sign an initial agreement with the state government in January, the Odisha chief minister’s office said in a statement. IOC operates a refinery in Paradip with a capacity of 300,000 barrels per day.
Bitumen:
MRPL Commissions New Bitumen Production Unit
(By Hindu Business Line, 17 December 2024)
MRPL has commissioned its new ‘Bitumen production train’, powered by ‘Biturox’ technology from Pörner of Austria. The unit, with an annual capacity of 1.50 lakh tonnes, doubles MRPL’s existing Bitumen production capability. India’s extensive highway network is integral to its development strategy, and Bitumen plays a crucial role in this journey.
