Ignoring Economic Pressure, Petroleum Products Consumption Set for Strong Growth in 2024
Petroleum products consumption in India is set for strong expansion in 2024. As per the latest available, country’s overall products consumption has averaged 218 million tonnes, an increase of 4%, y-o-y. These figures represents a different picture of the state of Indian economy which has shown signs of easing over the recent months. The HSBC India Manufacturing Purchasing Managers’ Index eased to 56.4 in December, from 56.5 in November. The index has been gradually coming down since reaching a high of 59.1 in March 2024. Moreover, India’s GDP growth slowed to 5.4% in the second quarter of FY25, marking its weakest performance in nearly two years. In such an environment of conflicting signals, it becomes imperative to look at individual products performance.
ATF: Over Jan-Nov, Aviation Turbine Fuel (ATF) has posted the strongest growth of 10%, y-o-y, among major products. Passengers carried by domestic airlines over Jan-Nov were 146 million as against 138 million during the corresponding period of the previous year, thereby registering an annual growth of 5.9%.
LPG: LPG consumption continues to grow in India and is up by 7%, y-o-y, over Jan-November. LPG penetration in India is near 100%. Nevertheless, it’s primarily the residential sector where demand continues to grow because of higher usage for cooking purpose.
Gasoline and Gasoil: Transportation fuel demand has also been strong with gasoline and gasoil demand up by 8% and 2% respectively, over Jan-Nov, y-o-y. However, relatively lower growth in gasoil consumption reflects the impact of weaker industrial activity on its consumption primarily in the logistics and freight sector.
Crude Imports: The strong demand of petroleum products is also being reflected in higher imports and refinery runs. Overall, India’s crude imports are up by 3%, y-o-y, to average 4.8 MMBD over Jan-Nov and refinery runs are up by 1%, y-o-y, to average 5.3 MMBD over the same period.
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