India's crude oil imports increased by about 8 per cent year-on-year in February, according to government statistics released on Wednesday, as fuel consumption in the world's third-largest oil importer and consumer reached more than two-decade highs.
Rising crude demand and a strong Indian economy augur well for increased refinery runs and imports, as well as cheaper Russian crude, according to Refinitiv analyst Ehsan Ul Haq, who also expects refiners to increase runs and imports as temperatures rise and people travel more.
Fuel demand in February reached its highest level in at least 24 years, according to statistics from the Petroleum Planning and Analysis Cell (PPAC) website this month.
Crude imports should rebound as Indian demand rises further in the coming months, according to UBS analyst Giovanni Staunovo.
Imports fell 6 per cent month on month to 22.57 million tonnes, according to PPAC statistics.
The month-on-month decline in imports could also be seasonal, as imports were lower in February last year as well, according to Haq.
Russia tightened its hold on India's oil market in February, resulting in the lowest level of African crude oil imports into India in at least 22 years.
In other news, Indian Oil Corp, the country's largest refiner, will decrease its annual oil purchases from Kuwait by 20 per cent beginning in April. To compensate, the Indian Oil Corporation (IOC) has raised its term crude volume with Iraq's Oil Marketing Company (SOMO) by 20,000 bpd.
Product shipments increased 12 per cent month on month to 5.06 million tonnes in February, with diesel accounting for 2.15 million tonnes.
The increase in exports comes despite India's plans to extend export limits on diesel and gasoline after the current fiscal year concludes this month in order to ensure the availability of refined fuels for the domestic market.