India's fuel consumption could rise by 9.8 per cent in the year to March 2022, its highest pace of growth in six years, driven by robust demand for gasoline and gasoil in Asia's third-largest economy, according to initial government projections.
The higher expectation of fuel consumption, a proxy for oil demand, points to a sharp recovery in industrial activity in the economy hit hard by the pandemic.
India could consume 215.24 million tonnes of refined fuels in the financial year 2021/22 compared to the revised estimate of 195.94 million tonnes consumed in 2020/21, data posted on the website of Petroleum Planning Analysis Cell (PPAC) showed.
India's economy returned to growth in the three months to December with its gross domestic product rising 0.4 per cent compared with the same period a year earlier.
The recovery is expected to gather pace as consumers and investors shake off the effects of the coronavirus pandemic.
From April 2020 to January 2021, the first 10 months of this fiscal year, India's fuel consumption fell by 13.5 per cent as lockdown measures to stem the spread of Covid-19 hit demand in the world's third-biggest oil consumer.
The increase in India's fuel consumption will aid global oil markets as the nation is seen as the main driver of rising demand for energy over the next two decades, the International Energy Agency said in January.
Local sales of gasoil and gasoline, which together account for half of overall refined fuel sales in India, is projected to rise by 13.3 per cent each, the data showed.
Consumption of diesel is related closely to economic growth and accounts for up to 40 per cent of the refined fuel sales in India.
With easing restrictions and resumption of business, India's jet fuel sales are expected to reach 6.45 million tonnes in 2021/22, a growth of about 74.2 per cent from the revised estimates of this year, the data showed.
Sale of liquefied petroleum gas, mainly used for cooking, is expected to rise 4.8 per cent to 29 million tonnes, the data showed.
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