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

Indian passenger vehicle sales grew 2.7 percent yearly in the financial year ended March, the slowest expansion since 2014.

India's Demand for Oil Keeps Growing Even as Vehicle Sales Fall
An attendant walks past a fuel pump at a Bharat Petroleum gas station in Mumbai, India, on June 28, 2018. (Photographer: Dhiraj Singh/Bloomberg)

(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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To contact the reporter on this story: Dhwani Pandya in Mumbai at dpandya11@bloomberg.net

To contact the editors responsible for this story: Pratish Narayanan at pnarayanan9@bloomberg.net, Andrew Janes, Ovais Subhani

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