Fuel demand slips to 2-yr low in September

Consumption of petroleum products dropped to 16.01 MT

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New Delhi, Oct 16: India’s fuel demand slipped to its lowest in over two years in September after a fall in diesel and industrial fuel consumption negated the rise in petrol and LPG consumption.

Consumption of petroleum products in September dropped to 16.01 million tonnes, its lowest since July 2017, from 16.06 million tonnes in the same month last year, according to data from the Petroleum Planning and Analysis Cell (PPAC).

Diesel, the most used fuel in the country, saw demand drop by 3.2 per cent to 5.8 million tonnes, while naphtha sales were down by a quarter to 844,000 tonnes.

Bitumen, used in road construction, too saw consumption drop by 7.3 per cent to 343,000 tonnes. Fuel oil sales edged 3.8 per cent lower in September to 525,000 tonnes.

These downward trends negated the rise in cooking gas (LPG) and petrol demand. The sale of petrol rose 6.2 per cent to 2.37 million tonnes, but sale of jet fuel or ATF fell 1.6 per cent to 666,000 tonnes.

LPG consumption surged 6 per cent to 2.18 million tonnes on the back of government's push for the use of cleaner fuel in household kitchens in rural areas in place of firewood to check pollution and safeguard the health of women.

Kerosene, which is fast being replaced by LPG and natural gas as a cooking medium, saw demand fall almost 38 per cent to 176,000 tonnes. Petroleum coke consumption was however 18 per cent higher at 1.73 million tonnes.

Meanwhile, Fitch Solutions revised downward its India oil demand forecast, reflecting a deteriorating macroeconomic backdrop and rising risks to growth. “We now forecast demand growth to average 3.8 per cent y-o-y London, Oct. 16: Oil eased further below $59 a barrel on Wednesday, pressured by concerns about weaker demand for fuel due to slower economic growth and forecasts of a further rise in US crude inventories.

Prices gained some support due to signs from the Organization of the Petroleum Exporting Countries that further curbs to oil supply could come in December. OPEC and its allies meet on Dec. 5-6 in Vienna to review output policy.

Brent crude, the global benchmark, slipped 7 cents to $58.67 a barrel by 1315 GMT. US crude gained 1 cent to $52.82.

“Prices are under pressure from increasing pessimism about the global economy and subsequent demand-side concerns,”

◗ Fitch Solutions revised downward its India oil demand forecast, reflecting a deteriorating macroeconomic backdrop and rising risks to growth. over the three years to 2021, down from 4.6 per cent previously,” it said, adding softening of Indian fuel demand adds to an increasingly bearish outlook for fuel demand globally.

“We had previously flagged India as the outperformer, forecast to overtake China as the global engine for growth. While the view still holds in the longer term, the near-term prospects have weakened,” it said.

More diversified demand growth will offer a level of Stephen Brennock broker PVM said.

In a bearish signal for demand, the International Monetary Fund said on Tuesday the US-China trade war would cut 2019 global growth to its slowest since the 2008-2009 financial crisis.

“Prices remain under pressure,” said Craig Erlam, analyst at OANDA. “Oil inventory today from API may be notable albeit unlikely to have any major impact on the broader trend.”

The American Petroleum Institute (API) reports its weekly U.S. inventory numbers at 2030 GMT, ahead of government stocks data. Analysts estimate US crude inventories rose by around 2.8 million barrels last week.

Optimism about an imminent Brexit deal had of oil

resilience moving forward, but structurally lower demand growth in China and common Asian emerging markets' exposure to a weaker external environment will drag to the downside. “We have revised down our India oil demand forecast, reflecting a deteriorating macroeconomic backdrop and rising risks to growth. In part this reflects the downward revision to the country's GDP growth forecast,” Fitch said.

“Growth has disappointed expectations, dragged down by slowing private consumption, weakened investment and underperformance in the services sector,” it added.

In response, the government has unleashed a raft of stimulus measures, including tax cuts, a liquidity boost for the banking sector and higher spending helped support the market, although this faded after EU sources said talks had hit a standstill and Ireland said there were still issues to be resolved.

Analysts have said any agreement that avoids a nodeal Brexit should boost economic growth and, in turn, oil demand.

Opec Secretary-General Mohammad Barkindo, meanwhile, has said an option for Opec and its allies is to implement deeper cuts in oil production.

On Tuesday, Barkindo said Opec would do what it could with allied producers to sustain oil market stability beyond 2020, in a signal the producers would continue to cooperate.

Opec, Russia and other producers have a deal to cut oil output by 1.2 million barrels per day until March 2020. on autos. “Our Country Risk analysts are relatively bullish on the prospects for headline economic growth from 2020 onwards, forecasting a rebound from 6.4 per cent in real terms in 2019, to 6.9 per cent and 7.3 per cent in 2020 and 2021, respectively,” it said.

Auto sales growth is also set to recover next year, supported by low base effects and improved policy support, which will, in turn, offer a lift to oil demand, it said.

“That said, we do not expect demand growth to return to its 2018 highs, as a challenging external environment, stresses in the banking and shadow banking sectors and tight fiscal constraints on the government mar performance in several of the more energyintensive segments of the domestic economy,” it added. Despite the prolonged slowdown in the car market, Mercedes-Benz, India’s biggest luxury carmaker, on Wednesday expanded its sports utility vehicle (SUV) range by introducing its new G-Class SUV called G350d to boost sales.

Priced at Rs 1.5 crore in pan-India showroom, the BS-VI-compliant, second generation, new G-Class 350d will take on the likes of Range Rover Sport and Toyota Land Cruiser LC 200 in the country.

The G-Class, undoubtedly, is the top model among luxury off-road vehicles in the country. The G-Class is a cult performance off-roader, which has set a high benchmark for many vehicles. With the introduction of the new G-350d, the offroader also becomes the most efficient ‘G’ ever.

In the 40,000-plus unit Indian luxury car market, its archrivals like BMW, Audi, and Jaguar Land Rover, Volvo Cars and Lexus fiercely compete with each other for a market share.

With the addition of the imported G-Class 350d, which is the first nonAMG-diesel variant of the G-Class, the Pune-headquartered auto major’s SUV portfolio now has eight models — GLA, GLC, GLE, GLS grand edition, AMG GLC 43 4MATIC, GLE coupe and AMG G63.

“The luxury car market for us is picking up and we hope this momentum continues,” Martin Schwenk, MD and CEO at MercedesBenz India told this paper on the sidelines of the launch. “We start our product offensive for 2019 today, and there cannot be a better vehicle to make an impression other then with the iconic G-Class,” he asserted.

Schwenk said with the new G350d, the company was offering over 15 speciality and AMG cars for buyers in the country.

“The launch of this vehicle further cements our top of pyramid product strategy for India,” he said, adding, “We have an exciting product offensive lined up for the last quarter of this December calendar year and we are confident of maintaining our leadership position in the luxury segment.”

The G-350d is powered by a 3.0-litre, in-line six-cylinder diesel engine that puts out a 286hp and 600Nm of torque. This is the same unit that does duty on the top-end Mercedes S-350d. Power is transferred to all four wheels via a 9-speed automatic transmission and the near 2.5-tonne SUV can hit 100kph speed from zero in just 7.4 seconds.