MOSCOW (MRC) -- India’s petroleum consumption increased to a record high in the first seven months of 2023 but growth has slowed markedly as the rebound from the coronavirus pandemic and lockdowns is completed, said Reuters.
The economy is being hit by the same combination of rapid inflation and slowing global trade that has hit other major economies across South and East Asia. Petroleum consumption increased to 135 million metric tons in the first seven months of 2023 from 128 million metric tons in the same period in 2022.
The increase in the first seven months was equivalent to roughly 255,000 barrels per day (bpd), down from growth of 415,000 bpd in 2021/22. Oil consumption growth of roughly 5% to 6% per year is consistent with the same reported growth in manufacturing output.
But it compares with growth of more than 1.0 million bpd in U.S. oil production in the first five months of 2023. It has not been fast enough to absorb the extra crude and tighten the global market at a time when consumption has been depressed in North America, Europe and China.
The relatively sluggish growth in India’s consumption has therefore added to downward pressure on crude petroleum prices so far in 2023.
We remind, Indian refiner Hindustan Petroleum Corp Ltd is meeting up to 23% of its oil needs through discounted Russian grades. Indian refiners, which rarely used to buy Russian oil, have been snapping up discounted barrels after many Western countries shunned purchases from Moscow following its invasion of Ukraine. HPCL's Russian oil intake is limited by the configuration of its refineries, Joshi said, but the company is maximizing the use of these cheaper so-called opportunity crudes, he added, helping "ringfence" it from risks arising from high oil prices.