Fuel demand in India, the world’s third-largest oil importer and third-largest oil consumer, is set to rebound to pre-crisis levels by the end of September, Indian Oil Minister Dharmendra Pradhan said at the virtual BloombergNEF Summit in New Delhi.
Judging from the trend in recent weeks after India lifted its lockdown, fuel demand will be “as usual” by the end of the quarter ending in September, the minister said, expressing a more optimistic view on demand than both OPEC and the International Energy Agency (IEA) which see India’s demand taking at least until the end of this year to recover.
“At the end of June, we have already achieved 85% of our demand compared to June 2019,” Pradhan said at the BloombergNEF Summit.
In May, the minister was expecting fuel demand to have returned to pre-crisis levels by the end of June, which suggests that India may be overly optimistic about its demand recovery.
At the end of May, Pradhan said that the country’s fuel demand was set to reach pre-coronavirus levels this month. In May, demand for fuel in the world’s third-largest oil importer was back at 65 percent, “and will reach pre-Corona level in June,” Pradhan told Times of India.
Speaking at the BloombergNEF Summit, Pradhan now said that “Unlocking process has started and a lot of economic activities are going on for more than one-and-a-half months.”
According to the minister, demand for gasoline, diesel, liquefied petroleum gas (LPG), and other commercial fuels is coming back to its normal level, while jet fuel demand continues to be a drag on overall demand – as it is everywhere in the world.
As demand recovers, India’s refinery capacity utilization picked up in May to an average of 77 percent after India started to ease the nationwide lockdown. Refinery throughput increased by 11 percent in May compared to April.