India's demand for petroleum products is expected to fall by 8 percent to 4.597 thousand barrels per day in 2020, according to the International Energy Agency (IEA) as part of its May oil market report.
“We expect oil demand to fall by 180 thousand barrels per day year-on-year in 1Q20 and 1.3 million barrels per day in 2Q20. Consumption should return to year-ago levels by 4Q20. Overall, Indian demand is expected to drop by 415 thousand Barrels per Day in 2020. Gasoil/diesel and gasoline will be the most affected,” IEA said.
The demand for petrol in the country is projected to decline by 350 thousand barrels per day in the second quarter of 2020, mostly due to mobility restrictions. The Agency has predicted that the demand for petrol will fall by 60 percent year-on-year in April as well as in May compared to the previous year.
The demand for diesel is projected to fall by 690 thousand barrels per day in the second quarter of 2020 and the demand for aviation turbine fuel (ATF) and kerosene is projected to decline by almost 40 percent in April-May, as approximately half of the demand for kerosene is used as jet fuel and will be severely affected by airline restrictions, IEA said.
Overall, India's oil demand is projected to decline to 4.60 million barrels per day in 2020 compared to 5.01 million barrels per day in 2019. The agency expects domestic production of crude oil to continue to decline in 2020.
“The country’s largest producers cite increased water cuts and underperformance of wells at mature fields as key reasons for the shortfall. Restrictions on the movements of workers to onshore fields due to the Covid-19 lockdown was also a factor,” International Energy Agency (IEA) said.
According to the report, crude oil output will stay stagnant throughout the coming months and is expected to decrease to 0.75 million barrels per day in 2020 compared to 0.80 million barrels per day registered in 2019.