India's fuel demand remains weak in August on monsoon

India's transport fuel demand continues to remain weak in August at 2.74mn b/d, down by 6pc on the month because of monsoon rains in most part of the country.

But fuel demand edged up slightly by 2pc on the year, preliminary oil ministry data show.

India's diesel demand is significantly affected by monsoons as heavy rains impede movement of commercial trucks and vehicles — major consumers of the fuel. Irrigation activities have slowed because of the rain as some parts of north India experience heavy floods.

Refiners also tend to schedule their turnarounds in June-September to coincide with overall weaker domestic demand.

Diesel demand fell by 11pc on the month to 1.57mn b/d in August, while gasoline demand rose marginally by 1pc to 962,210 b/d (see table).

Demand for jet fuel remained flat on the month at 179,461 b/d because the sector continued to suffer from slow recovery in air travel.

On a cumulative basis, India's transport fuel demand totalled 3mn b/d in January-August, up by just 3pc on the year. Gasoline demand had the largest increase of 6pc on the year in the period, followed by jet fuel with 3pc.

Transport fuel demand may continue to remain under pressure in September as state refiners offer cargoes for exports. Indian state-controlled refiner MRPL has offered a record number of gasoline cargoes for September as the ongoing monsoon season continues to weigh on domestic demand.

India has exported 1.1mn t of finished gasoline in August, surpassing the 896,000t shipped in July, according to oil analytics firm Vortexa.

India's crude imports rose slightly by 2pc on the year to 4.48mn b/d in August, according to Vortexa and Kpler data.

By Rituparna Ghosh