Indian refinery majors look to tap rising domestic fuel demand

New Delhi/Mumbai: Indian refinery majors, especially the private sector companies, plan to cater to increasing domestic fuel demand. India’s fuel demand surged for the 13th straight month in November 2015, which was aided by diesel and petrol consumption, and oil-product exports slid, according to oil ministry data. The demand is being driven by accelerated economic growth and favourable government policy changes, to safeguard themselves against slowing exports due to global oversupply. Refiners are expanding in the bulk market and plan to increase their share of retail market. Essar Oil Limited predicts that a rapid recent domestic expansion in industrial and automotive consumption will continue and thereby increase domestic fuel demand. Globally, diesel is expected to be into oversupply and prices are expected to decline, as per BMI Research. Price-control deregulation by the government has also helped make retail sales more attractive to private sector companies. Refiners are also getting bulk diesel supply orders from the Indian Railways, which further strengthens their margin outlook. The International Energy Agency (IEA) projects Indian energy consumption to double by 2040.

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