India's June fuel demand rises 17.9% year-on-yearWhile all eyes seem focused on the fear of reduced demand in the OECD, keep an eye on the third world's increasing demand for gas and diesel. Millions in these countries are coming out of poverty, and can't afford Teslas, but they can put gas in an old scrap scooter they put together, and are joining the world economy. Food costs are rising, and many need to get to work, and work more. The third world is where a big part of growth in oil consumption will be coming from.
In India, the middle class is driving oil demand, stronger every year. Indians make up the majority of tourists now coming to Thailand.
https://www.reuters.com/article/india-fuel-sales/indias-june-fuel-demand-rises-17-9-year-on-year-idUSKBN2OJ1MC India's June fuel demand rises 17.9% year-on-year
Global oil prices have surged in response to concerns about tight supplies and disruption linked to oil producer Russia’s invasion of Ukraine, but Indian consumers have to an extent been sheltered as Indian refiners have bought cheaper Russian fuel the West has shunned.
Consumption of fuel, a proxy for oil demand, totalled 18.67 million tonnes, data from the Indian oil ministry’s Petroleum Planning and Analysis Cell showed.
“Indian diesel and gasoline demand was relatively low in May-September 2021. As a result, around 18% increase is from a lower base,” said Refinitiv analyst Ehsan Ul Haq, but added pent-up demand could drive a recovery to pre-pandemic levels in the next few months.
“The purchasing power of India’s middle class is rising in spite of recent spike in food and energy prices,” he said, although he did not rule out some demand destruction.
Diesel consumption rose 23.9% year-on-year to 7.68 million tonnes and was up about 21.9% from two years ago.
Sales of gasoline, or petrol, were 23.2% higher from a year earlier at 2.97 million tonnes.
India’s gasoil demand rose rapidly during the first two weeks of June, and long queues appeared at some fuel stations as concerns grew over supply.
“We expect genuine strength coming from middle distillate demand,” said Viktor Katona, co-head of crude analysis at Kpler.
This would come from general demand, with “India quite the exception in more or less keeping fuel prices intact, largely thanks to its widespread buying of heavily discounted Russian crude,” downstream expansions and higher exports, Katona added.
Indian private refiners such as Reliance and Nayara have been among the biggest buyers this year of discounted Russian supplies.
However, the country last week to try to increase local supply imposed a windfall tax on producers and refiners that have boosted product exports to gain from higher overseas margins.