India’s fuel demand growth can return to normal levels by mid-May as the nation take steps to end a lockdown aimed at stemming the spread of corona virus. Fuel demand growth in India plunged to historic lows in April, provisional data shows, as the country’s eight-week long lockdown badly hit economic and industrial activity.
As Pradhan told IHS Markit’s CERAWeek conversations -“Since last two week there is a gradual increase in the demand, very slow, but we are confident by middle of May we will be moving towards the normal position. That’s our calculation”. Who are facing storage constraints at a time when lower cracks in overseas markets have made exports unattractive, Falling fuel demand has reduced crude processing by refiners.
Pradhan said the slump in global oil prices, along side with falling fuel demand, would cause inventory losses for refiners. Refiners had to defer some oil cargoes thanks to the autumn in local demand. He added – “Our refiners face severe inventory loss because all of our purchases from February, March, and April, prices aren’t what they’re today. So we have to pay the whole price. It’s a double burden. There’s a market loss and a listing loss for our oil companies”.
Reliance Industries Ltd the operator of the world’s biggest refining complex, suffered its worst profit in about 11 years in the March quarter due to oil prices. Indian refiners would report inventory losses fuel demand of more than around 250 billion rupees (i.e. $3.3 billion) in the January-March quarter after the 70% fall in oil prices, Crisil Rating, a unit of Standard and Poor’s, said in a recent report.