India's oil product demand during October increased month-on-month by 113,000 barrels per day, supported by an uptick in economic activities in the post-monsoon season and the Diwali festival, according to S&P Global Commodity Insights.
Demand was up on the year by 130,000 barrels per day, driven by gasoil and gasoline, which were up 83,000 barrels and 67,000 barrels, respectively.
After two consecutive cuts in windfall taxes to nil for ATF, gasoline and USD 10 per barrel for gasoil exports, the Indian government started raising the export taxes again from mid-October.
The tax on ATF exports was raised to USD 7 per barrel mid-October with a subsequent review to USD 10 per barrel beginning November 1. Similarly, the tax on export of gasoil was raised to USD 24 per barrel mid-October with a subsequent review to USD 26 per barrel beginning November 1."
The tax on gasoline exports continues to remain nil. The export tax review is done in accordance with market conditions with due discussion with market participants.
In the near term, S&P Global Commodity Insights expects India's oil demand to rise sequentially by about 2,10,000 barrels per day in the fourth quarter after the monsoon season, boosted by festive and holiday seasons. On a year-on-year basis, the demand in Q4 is expected grow about 1,00,000 barrel, down from 3,70,000 berrel over the first three quarters of this year, which was boosted by a low base, it said.
"Overall, India's oil demand is expected to grow by more than 3,05,000 b/d in 2022, before easing to a 2,20,000-b/d growth in 2023.
Middle distillates (gasoil and kerosene/jet fuel combined) will account for about half of the growth in 2022, partly due to a slow recovery in 2021, before contributing to about a third of the growth in 2023," it added.
