Govt to reassess oil demand, refinery capacity projections

02 Sep 2022 CW Team

The government has begun a reassessment of the country's future oil demand and refining capacity requirements as domestic consumption soars, planned refineries are delayed, and predictions of a quick end to the oil age prove exaggerated.

The petroleum planning and analysis cell of the oil ministry has been asked to prepare a fresh report on the future fuel demand and refining capacity needs, according to a report citing unnamed officials.

"In the early days of Covid or before that everyone seemed to believe that oil demand would quickly drop and give way to alternatives," the official said. "But that doesn't seem to be the case. So, we need to have the capacity to meet the demand that's expected to grow for years to come."

The International Energy Agency (IEA) expects global oil demand to surpass pre-Covid levels next year.

Domestic petrol and diesel demand have grown 23.4% and 17.5% respectively in the four months to July over the year earlier. The demand is 11% higher than the pre-Covid level for petrol and 2% lower for diesel. Overall demand for all refined products has risen 14% year-on-year in the April-July period. India is a net exporter of fuel but strong local demand has pushed up imports and reduced exports.

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