India's Demand for Oil Keeps Growing Even as Vehicle Sales Fall

(Bloomberg) -- India’s oil demand grew for a fourth month in March, although the pace of gains slowed from February as falling vehicle sales weighed on transportation fuel consumption even amid campaigning for federal elections.

• Total usage of oil products rose 1.3% y/y to 18.9m tons in March, according to the oil ministry’s Petroleum Planning & Analysis Cell
• Demand in the FY through March increased 2.7% y/y
  • For a breakdown of individual oil products, click here

Key Insights

• Indian passenger vehicle sales grew 2.7% y/y in the financial year ended March, the slowest expansion since 2014, according to the Society of Indian Automobile Manufacturers; it sees 3%-5% growth in the current fiscal year
• Oil demand growth in 2019 may miss the International Energy Agency’s estimate of 245,000 barrels a day, Kunal Agrawal, a senior industry analyst at Bloomberg Intelligence, wrote in an April 12 note
  • Growth in gasoline and diesel usage may remain sluggish due to continued weak motor vehicle sales, weighing on overall oil products demand growth, he wrote
• Rising crude prices and a slowdown in economic growth may also weigh on Indian oil consumption, Nomura said in an April 12 note

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