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Rise in India’s crude oil imports driven by increased consumption
India Ratings and Research (Ind-Ra) has published its latest news digest on India’s oil and gas sector. The report highlights the trends in the sector, with a focus on domestic production, import, consumption, refining and gross under-recovery, regulatory changes and recent rating actions.
India’s crude oil dependency has increased, indicated by stagnant domestic production and increased imports since 2012. According to Petroleum Planning & Analysis Cell (PPAC), the average crude oil import dependency was 82.8% of the total crude oil consumption in 2018 compared with 81.7% in 2017. PPAC estimates crude imports of 227mn tonnes for 2019 (2018: 220mn tonnes).
Crude imports increased 22.5% from a monthly average of 15.1mn tonnes during 1Q2013 to a monthly average of 18.5mn tonnes during the three months ending May 2018 due to sustained demand. On the other hand, domestic crude production has been stagnant at 3–3.1mn tonnes since 1Q2013. Crude imports continue to increase despite rising international crude prices since February 2016, thus indicating strong demand for crude and dependence on crude imports to fulfil the same, notes Ind-Ra.
Meanwhile, domestic natural gas production continuously declined during 2013–2017 and grew 2.2% to 89.7mn cm/d in 2018 (still lower than 2013: 111.4mn cm/d). This has led to increased reliance on the import of re-liquefied natural gas, as domestic consumption has been gradually increasing. Furthermore, India’s crude oil production decreased 3% year-on-year in May 2018. During the month, the production volume of fields under production sharing contracts increased 0.6% year-on-year, while it declined for Oil India and Oil & Natural Gas Corporation by 1% and 4.8% year-on-year, respectively.
In May 2018, refining throughput was 22.2mn tonnes, up 6.8% year-on-year.
Natural gas production was 1.5% year-on-year lower in May 2018, while consumption was 6.2% higher, due to an increase in domestic demand. Moreover, there was a 16.7% year-on-year increase in LNG imports during May 2018.
Source: PPAC and Ministry of Petroleum and Natural Gas
News Item details
Journal title: Petroleum Review
Countries: India -
Subjects: Gas markets, Oil markets, Refining, Oil and gas, Exploration and production
