Driven by domestic consumption and demand for refined products in the export market, the country’s crude oil imports in January hit a 20-month high of 21.4 million tonnes (mt), latest government data showed.

According to the Petroleum Planning and Analysis Cell (PPAC), imports last month were the highest since April 2022, when the world’s third largest crude oil importer bought 21.6mt of the critical commodity, which accounts for more than 85 per cent of its domestic requirement.

Imports grew 8 per cent month-on-month from 19.8 mt, while on an annual basis the in-bound shipments grew roughly 6 per cent from 20.4mt, PPAC data showed.

Exports of refined petroleum products rose 7.5 per cent and 3.1 per cent on an annual basis during January 2024 and the April-January period of FY24, respectively.

The increase in exports during April-January was mainly due to an increase in outbound shipment of aviation turbine fuel, vacuum gas oil and petrol.

Even though domestic consumption of diesel, the mainstay of the transport and logistics sector, was lower in January 2024, sources said the demand will inch up as industrial, mining and farm activity increases. Besides, some traction will come from March-end onwards as campaigning for the upcoming Lok Sabha elections is expected to lift demand for diesel and petrol.

S&P Global Commodity Insights said India’s oil demand is expected to grow by 203,000 barrels per day (b/d) in 2024. Gasoil and gasoline will be the highest contributors to this growth, each having a share of 33 per cent and 31.5 per cent, respectively.

Oil demand is holding up quite well and should continue rising supported by solid economic growth.