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UBS Investment Research
India Oil and Gas Sector
India oil monthly: Issue 5
December oil demand grows highest since October’09
Based on data from Reuters and PPAC, India’s domestic oil product demand rose
7.2% YoY to 3.02mbpd in Dec’10 due to higher diesel and naphtha use. YTD
demand growth is 2.1% vs UBSe at 4% for FY11.
Gasoline, diesel & LPG grow 8.1%, 9.5% & 11.9% YoY in December’10
Diesel sales rose 9.5%, highest growth in seven months, partly on the back of a
27% YoY growth in commercial vehicles sales in the month. We also suspect this
could be ahead of an expected price hike in Dec/Jan which has not materialised
yet. Diesel growth had been tepid since August 2010. Gasoline demand softened to
8.1% vs. 16.7% in November. Naphtha demand rose 41.7% YoY on increased
demand from petrochemical sector, mainly on the start of IOC’s petchem plant in
Panipat. Bitumen demand declined 8.5%, a negative indicator for road sector.
In previous month of November oil demand was up 1.6% YoY
Oil demand rose 1.6% YoY in November 2010 versus an increase of 7.2% in
December. In November, YoY gasoline and diesel demand had risen 16.7% and
3.8% as compared to 8.1% and 9.5%, respectively in December. So far in FY11,
out of total oil demand, diesel and gasoline account for 43% & 10%, respectively.
We expect demand growth to be slower in 2HFY11
We expect consumer demand to drive a 7-9% growth in gasoline sales in FY11-14.
We believe diesel demand will grow at 5-6% on the back of agricultural and
industrial growth. We expect a CAGR of 8% pa for gasoline and 5% pa for diesel
over FY10-14 period.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
India Oil and Gas Sector
India oil monthly: Issue 5
December oil demand grows highest since October’09
Based on data from Reuters and PPAC, India’s domestic oil product demand rose
7.2% YoY to 3.02mbpd in Dec’10 due to higher diesel and naphtha use. YTD
demand growth is 2.1% vs UBSe at 4% for FY11.
Gasoline, diesel & LPG grow 8.1%, 9.5% & 11.9% YoY in December’10
Diesel sales rose 9.5%, highest growth in seven months, partly on the back of a
27% YoY growth in commercial vehicles sales in the month. We also suspect this
could be ahead of an expected price hike in Dec/Jan which has not materialised
yet. Diesel growth had been tepid since August 2010. Gasoline demand softened to
8.1% vs. 16.7% in November. Naphtha demand rose 41.7% YoY on increased
demand from petrochemical sector, mainly on the start of IOC’s petchem plant in
Panipat. Bitumen demand declined 8.5%, a negative indicator for road sector.
In previous month of November oil demand was up 1.6% YoY
Oil demand rose 1.6% YoY in November 2010 versus an increase of 7.2% in
December. In November, YoY gasoline and diesel demand had risen 16.7% and
3.8% as compared to 8.1% and 9.5%, respectively in December. So far in FY11,
out of total oil demand, diesel and gasoline account for 43% & 10%, respectively.
We expect demand growth to be slower in 2HFY11
We expect consumer demand to drive a 7-9% growth in gasoline sales in FY11-14.
We believe diesel demand will grow at 5-6% on the back of agricultural and
industrial growth. We expect a CAGR of 8% pa for gasoline and 5% pa for diesel
over FY10-14 period.
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