India's Oil Demand Surges 4.6% Despite Flat FY24 Output

18 Apr 2024 , 01:37 PM

India’s domestic production stayed constant in the fiscal year 2023–24 (FY24), but the country’s consumption of petroleum products climbed by 4.6% to 233.3 million metric tonnes (MMT).

A recent report from the oil ministry states that, aside from LPG, lubes, bitumen, petcoke, and LDO, the largest increases in petroleum production consumption (a measure of oil demand) in FY24 were 6.4% for motor spirit (MS), or petrol, 4.4% for high speed diesel (HSD), 11.8% for ATF, and 14.3% for naptha. 223 MMT of product were consumed in the prior year.

In contrast, domestic crude oil production in FY24 was 29.4 Million tonnes, essentially unchanged from the previous year’s 29.2 Million tonnes. In response, India imported the most crude oil of the year, accounting for 87.7% of the nation’s total oil needs, which were supplied by foreign nations. By contrast, in FY23 and FY22, India’s reliance on crude oil imports was 87.5% and 87.4%, respectively.

The Indian government has been pressuring the nation’s oil explorers, ONGC and Oil India Limited (OIL), to increase output in order to protect the nation from rising oil prices. The biggest oil and gas explorer in India, ONGC, wants to progressively increase output by FY25 by reversing years of declining production. To this end, the company is focusing on additional output from its Krishna Godavari (KG) basin. It is anticipated that the KG basin production surge will result in an 11% rise in the company’s overall oil production and a 15% increase in its gas production.

Regarding the crude trade, India has expanded the range of countries from which it purchases crude oil, having previously purchased from 29 to 37. This decision has been made to guarantee reasonably priced energy supplies in India.

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