The Covid-19 pandemic is unlikely to have a significant medium- or long-term impact on Indian oil demand, with growth returning to pre-outbreak trends in as little as two years, according to Sanjiv Singh, chief executive of the country's biggest refiner state-controlled IOC.
Indian oil demand — including LPG — had been growing at about 4pc/yr in recent years, although growth slowed to near-zero in the April 2019 to March 2020 financial year because of a weakening economy.
Excluding jet fuel, demand is likely to return to recent average levels before the end of this year, Singh told Argus. "Two years down the line, we should come back to a similar demand trend to before Covid — that is roughly 4pc/yr average product growth," he said.
Gasoline demand was at around 84-85pc of year-earlier levels over 1-17 June, while diesel had recovered to 87-88pc. But jet fuel was only at around 28pc of typical demand levels in the period.
Longer-term demand fundamentals are sound, Singh said. "For all our bigger projects we look at demand numbers for 15 years or so, and we also look at export opportunities. For those things, at least for India, we do not see significant change."
IOC's major refinery plans are on track and the company does not plan to cut its capital expenditure in 2020-21, Singh said.
Subscribers to Petroleum Argus can read the full interview with Sanjiv Singh here
