India’s crude oil imports appreciated in October 2023 largely propelled by growing domestic demand after the inbound shipments hit their lowest in the last 12 months in September this year.

According to the Petroleum Planning and Analysis Cell (PPAC), crude oil imports by the world’s third largest importer rose 6 per cent q-o-q and more than 2 per cent y-o-y to 18.53 million tonnes (mt) last month.

However, the imports during October were the second lowest during the current financial and calendar year, the PPAc data shows.

Analysts and market players said that imports rise during October-December in line with the revival in industrial, mining and construction activities. Besides, Rabi sowing also commences during the same period.

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Also, the December quarter also witnessed higher demand for petrol and diesel due to the festival and marriage season, which commenced last week.

Rising consumption

The consumption of petrol and diesel rose to a four-month high in October, while jet fuel sales surged to their highest in the current financial year and calendar year as rising industrial and construction activity coupled with the onset of the festival season boosted sales.

Domestic oil marketing companies (OMCs) have also increased refinery runs for the remainder of 2023 to meet the growing demand for auto fuels, bitumen, fuel oil and other refined petroleum products.

India imported 4.66 million barrels per day (mb/d) of crude in October 2023, which is almost flat compared to September, Kpler data shows.

OPEC in its latest monthly oil market report for November 2023 said that India’s oil demand outlook in Q4 2023 should continue to benefit from strong annual GDP growth in 2023, combined with robust manufacturing activity and a proposal by the Indian government to increase capital spending on construction.

Besides, the post-monsoon harvesting season and construction activity are also expected to support oil demand growth. In addition, the forward-looking indicators show strong manufacturing and services PMIs, suggesting prospects for healthy oil demand in the near term, it added.

“In Q4 2023, oil demand is projected to grow by 243,000 barrels per day (b/d), y-o-y. Distillates are expected to be the driver of oil demand growth, supported by harvesting, construction and manufacturing activity. Additionally, traditional festivities are expected to support mobility and boost gasoline demand, while increasing air travel is expected to support jet/kerosene demand,” OPEC has projected.