India’s domestic demand of diesel and petrol rose to record highs in May, pushing the country’s overall fuel consumption for the month higher year-on-year, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed.
Oil imports from Iran also surged to about 705,000 barrels per day (bpd) in May, their highest level since October 2016, according to data from shipping and industry sources, despite the threats of fresh U.S. sanctions.
From June, however, India’s oil imports from Iran could drop because at least two refiners, accounting for about 35 percent of Indian refining capacity of around 5 million bpd, are preparing to curb purchases under pressure from the U.S. sanctions.
Reliance and Nayara (Essar Oil) are the likely refiners shunning purchases from Iran. Nayara Energy, formerly known as Essar Oil and in which Russia’s Rosneft holds a majority stake, was the biggest Indian buyer of Iranian oil in May, receiving more than 200,000 bpd.
Fuel consumption in India totalled 18.72 million tonnes last month, during which diesel sales soared to 7.55 million tonnes and petrol consumption climbed to 2.46 million tonnes – the highest monthly sales figures in PPAC data going back to April 1998.
India, the world’s third-largest oil consumer, used 35.2 million tonnes of diesel during January to May this year, up 6 percent from the corresponding period last year.
The country’s monthly diesel sales have averaged 7.05 million tonnes in 2018, compared with a monthly average consumption of 6.6 million tonnes last year.
Sales of gasoline, or petrol, rose 7.6 per cent in May from April and are up 2 per cent from the same month last year. Monthly demand for petrol has averaged 2.27 million tonnes this year, up 7 per cent from the 2017 average of 2.12 million tonnes.
India’s diesel exports during March to April this year were 3.79 million tonnes, down 22% from 4.87 million tonnes of the industrial fuel exported during the same time last year.
Iran remained the third-biggest oil supplier to India last month behind Iraq and Saudi Arabia, the data showed, with the United Arab Emirates having replaced Venezuela as the fourth-biggest supplier.