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New Delhi: India’s petroleum product demand is expected to fall by eight per cent to 4,597 thousand barrels per day in 2020, International Energy Agency (IEA) said as part of its May oil market report.
“We expect oil demand to fall by 180 kb/d y-o-y in 1Q20 and 1.3 mb/d in 2Q20. Consumption should return to year-ago levels by 4Q20. Overall, Indian demand is expected to drop by 415 kb/d in 2020. Gasoil/diesel and gasoline will be the most affected,” IEA said.
The country’s petrol demand is projected to fall by 350 thousand barrels per day in the second quarter of 2020, primarily due to mobility restrictions. The agency has projected petrol demand to fall 60 per cent year-on-year in April as well as May, as compared to the year ago period.
Diesel demand is projected to contract by 690 thousand barrels per day in the second quarter of 2020 and demand for aviation turbine fuel (ATF) and kerosene is projected to decline by almost 40 per cent in April-May, as roughly half of the kerosene demand is used as jet fuel and will be severely impacted by airline restrictions, IEA said.
Overall, India’s oil demand is expected to fall to 4.60 million barrels per day in 2020, as compared to 5.01 million barrels per day recorded in 2019. The agency expects domestic crude oil production to continue to decline in 2020.
“The country’s largest producers cite increased water cuts and underperformance of wells at mature fields as key reasons for the shortfall. Restrictions on the movements of workers to onshore fields due to the Covid-19 lockdown was also a factor,” IEA said.
According to the report, crude oil production will remain subdued in the coming months and is projected to decline to 0.75 million barrels per day in 2020, as compared to 0.80 million barrels per day recorded in 2019.