India’s crude imports rise 9.1% in 2007-08

May 4, 2008

New Delhi (Gulf news)-- India imported 9.1 per cent more crude in 2007-08 than the year earlier as refining capacities expanded and local demand clocked the highest growth in eight years, government data showed on Friday.

Asia’s third-largest oil consumer shipped in 2.44 million barrels per day (bpd) crude in the year ended March that saw Essar Oil’s Vadinar plant running at full steam of 210,000 bpd and Indian Oil Corp’s Panipat unit running at 240,000 bpd.
In March, crude oil imports grew 1.7 per cent to 2.47 million bpd.
Oil product sales, a proxy for demand, rose seven per cent in 2007-08 to 129.24 million tonnes with consumption of diesel and petrol robust.
A booming economy and prices kept artificially low helped diesel sales rise 11.1 per cent, the highest in 12 years, while a surge of 11.2 per cent in petrol sales was the biggest in eight years.
“A major factor supporting the strength of Indian demand, aside from the country’s buoyant economic growth, is the policy of capping retail fuel prices far below international levels,” the International Energy Agency said in its monthly report.
IEA revised up its 2008 oil product sales forecast for India to 2.9 million bpd, a growth of 4.8 per cent.
In March, oil products demand grew 6.3 per cent. Diesel sales, which account for nearly a third of domestic sales, grew by an annual 10.6 per cent in March while petrol was up 6.5 per cent in the fast-growing economy.
Fuel prices are state-controlled in India while world oil prices above $100 a barrel mean better profits for selling abroad.
India compensates state-run firms for selling auto fuels at lower prices, but no such mechanism exists for private retailers which have turned focus to overseas markets.
India exported 17 per cent more oil products in 2007-08 than the previous year, with two-third of it being shipped out by private refiners. In March, exports grew 8.5 per cent to 3.36 million tonnes.
High local demand and reducing role of private players in retail sector, forced India to import 22.9 million tonnes of oil products in the last fiscal, a growth of 27.3 per cent on year.
Imports in March jumped 46.2 per cent from the same month a year earlier to 1.93 million tonnes.
Diesel imports soared more than nine times to 288,600 tonnes in March.