(Bloomberg) -- India’s oil consumption surged 11 percent to the most on record last year as rising income levels spur greater use of cars, trucks and motorbikes, expanding fuel demand.
The world’s second most populous nation consumed 196.5 million tons of oil products in 2016, up from 177.5 million tons in 2015, according to the Oil Ministry’s Petroleum Planning and Analysis Cell. Gasoline demand increased 12 percent in the year to 23.7 million tons and diesel consumption grew 5.6 percent 76.7 million tons.
Greater automotive use spurred by rapid economic expansion has made India a bright spot for global oil demand and local refiners are racing to add capacity. The International Energy Agency forecasts India to be the fastest-growing crude consumer in the world through 2040.
“We expect gasoline growth at 10 percent” and oil demand to expand by 7.6 percent this year, driven by strong passenger vehicle sales, said Sri Paravaikkarasu, a senior consultant at FGE in Singapore. “Our expectation for oil prices in 2017 is $50 to $60 per barrel, which should support robust growth in transport and consumer fuels in India.”
Brent oil traded at $53.86 a barrel on Wednesday, up 0.4 percent, as of 7:36 a.m. London. The global benchmark has lost 5.2 percent this year.
Oil consumption in December grew at the slowest pace for the month since 2013, as the government’s cash crackdown skewed the trend. The country consumed 16.5 million tons of oil products last month, 4.3 percent more from the year ago period.
India’s auto sales, including commercial vehicles and motorcycles, rose 9.2 percent last year to 21.9 million, according to the Society of Indian Automobile Manufacturers.