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India oil monthly: Issue 2
Overall oil product demand down 6.2% on lower heavy distillate sales
Based on data from Reuters and the Ministry of Petroleum & Natural Gas, India’s
domestic oil product demand fell 6.2% YoY to 2.5mbpd in September 2010 and
YTD demand growth has been 1.4% vs. the same period in FY10.
Gasoline/diesel/LPG grow 8.3%/1.6%/8.3% YoY in September 2010
So far in FY11, gasoline and jet fuel have been the biggest drivers of Indian oil
demand. Gasoline demand was supported by strong growth in domestic vehicles
sales in September. Diesel sales grew 1.6% YoY. On the other hand, YTD demand
for naphtha, heavy distillates, and fuel oil declined. Bitumen and fuel oil demand
declined 33.8% and 7.6% YoY, respectively.
In August, oil demand was down 5.3% YoY
Oil demand fell 5.3% YoY in August 2010 compared with a decline of 6.2% in
September. In August, YoY gasoline and diesel demand rose 11.1% and 2.5%
compared with 8.3% and 1.6% in September, respectively. So far in FY11, out of
the total oil demand, diesel and gasoline have accounted for 42.8% and 10.4%,
respectively.
We expect demand growth to be slower in H2 FY11
Our estimates for oil product demand growth for FY11 are slightly conservative
and we expect consumer demand to drive 7-9% growth in gasoline sales in FY11.
We believe diesel demand will grow at 5-6% on agricultural and industrial growth.
UBS expects quarterly GDP growth in the 9-10% range in H2.
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