Growth in Indian coke use outstrips other oil products

Rising demand for petroleum coke has made it the fastest-growing petroleum product consumed in India during the last decade, according to a report by a division of the Indian petroleum ministry.

Coke use registered double-digit compound annual growth rate (CAGR) in the decade up to the Indian financial year ending on 31 March 2020, partly as a result of its increased popularity with cement makers. The trend also fuelled demand for seaborne coke, making India the world's biggest importer of the product.

Indian coke consumption grew at a CAGR of 12.6pc in the last decade, according to report by the Petroleum Planning and Analysis Cell, an arm of the petroleum ministry. Coke was the only petroleum product to register double-digit growth. The next fastest-growing product, gasoline, registered growth of 8.9pc over the decade, followed by liquefied petroleum gas at 7.2pc and aviation turbine fuel at 5.6pc.

India's consumption of coke rose more than threefold from 6.6mn t in the 2009-10 fiscal year ended 31 March 2010 to 21.7mn t in 2019-20, data show. The growth was fuelled by a rise in the acceptability of coke as a fuel in cement-making kilns. The switch to coke from coal was guided by its competitive price advantage. India's cement industry, the second biggest in the world, accounts for about 71pc of the country's coke consumption. Cement output rose to 334mn t in 2019-20 from 200mn t in 2009-10.

The decade was marked by a pronounced shift in the fuel strategy used for the cement-making process, said Surinder Gupta, an independent cement industry consultant. "The use of coke as a fuel for cement manufacturing started around 2009-10. Shree Cement was the first Indian company to adopt coke as a fuel and its success pulled in all the other companies," said Gupta, who headed the consumer sales division of state-controlled refiner IOC until early 2011 and was later the commercial adviser to Dalmia Cement until 2019.

India's coke consumption rose for seven consecutive years until 2017-18, when it touched an all-time high of 25.7mn t. But coke consumption declined by 17pc on the year to 21.3mn t in 2018-19 as regulatory uncertainties pared demand and limited imports. The Indian Supreme Court was at that time mulling a coke import ban amid environmental concerns following a surge in imports starting in 2016.

Consumption then increased marginally to 21.7mn t in the year ended 31 March 2020 after India's policy was clarified, with cement makers exempt from the import ban. This encouraged them to move away from other alternatives such as high-sulphur US thermal coal.

The last decade was marked by an increase in the use of sour crude by Indian refineries, leading to an increase in their coke output, said Gupta. But the rise in demand was stronger than the country's production capacity, leading to higher imports. India is estimated to have imported 10.8mn t of coke in 2019, a 61pc year-on-year increase from a low base in 2018, according to GAC Shipping data. India imported a record 13.8mn t in 2016.

By Ajay Modi

India's coke consumption jumps in past decade