India imported 15.18 million mt, or an average 3.71 million b/d, of crude oil in September, down 9.8% year on year, latest provisional data from the country’s Petroleum Planning and Analysis Cell showed, continuing a weak trend as the fall-out from the coronavirus pandemic continues to dampen domestic fuel demand.
The imports in September were 10% lower than in August, reflecting a slowdown in economic activity due to movement restrictions imposed by the government to combat the spread of COVID-19.
Over January-September, India’s crude imports fell 11.2% on year to 148.68 million mt or 3.98 million b/d, the PPAC data showed.
However, Asia’s third-largest petroleum consumer is poised to raise crude imports in the fourth quarter as major refineries lift run rates to boost transportation fuel output for the festive periods in November and December.
India is expected to receive around 47.8 million mt, or 350.4 million barrels, of crude oil in Q4, up 8% from 44.374 million mt imported in Q3, according to feedstock trading and fuel marketing managers at major Indian refiners including Bharat Petroleum Corp. and Hindustan Petroleum Corp. surveyed by S&P Global Platts in the week of Nov. 8.
Indian refiners are eyeing an increase in run rates over October-December as demand for diesel and gasoline is expected to rebound with the easing of movement restrictions and the upcoming festive seasons.
“Crude throughput and fuel demand may have hit the bottom for the year in Q3. The year-end holiday and [November] festive periods would help lift Q4 consumer oil demand, refinery run rates and subsequently crude oil imports,” a feedstock trading manager at BPCL said.
The average run rate for refineries in India could rise from 86% in September to 90% by November and 100% or more by December, according to refinery sources and industry information collected by Platts.
The major celebrations in Q4 include Diwali in November, which typically spurs a seasonal uptick in driving activity, industry sources said.
In anticipation of the seasonal uptick, India’s gasoline demand is expected to average 760,000 b/d in Q4, up from 700,000 b/d in Q3, and higher than the 745,000 b/d averaged over 2019, data from S&P Global Platts Analytics showed.
Going forward, Platts Analytics expects Asian oil demand to rise to 37 million b/d in Q4 from 35.6 million b/d in Q3, although it will still be 1.6 million b/d lower than in Q4 2019.
Source: Hellenic Shipping