India oil demand slows on rains, unrest

Bloomberg

India’s oil product demand contracted for the first time in almost two years amid strong monsoon rains and unrest in some provinces.
Fuel use during September in the world’s fastest growing consumer fell to 14.6 million tons last month, down 2 percent from a year earlier, according to the oil ministry’s Petroleum Planning & Analysis Cell. That’s the first time demand has fallen year-on-year since October 2014.
In addition to seasonal rains than damped demand, violent protests in the southern Indian states of Karnataka and Tamil Nadu over sharing river water disrupted fuel supplies, S. Ramesh, director-marketing at India’s second-largest oil retailer Bharat Petroleum Corp., said in a phone interview. Unrest in the northern state of Jammu and Kashmir also affected demand, he said.
“This was an unusual month. There were disturbances in some states,” Ramesh said. “Also monsoon rains were very good during the month, which resulted in lower demand from the agriculture sector.”
The International Energy Agency expects India to overtake Japan this year as the world’s third-biggest consumer and be the fastest-growing crude consumer through 2040. In August, India’s oil product demand rose 11.4 percent year-on-year, the fastest pace since March. It was also was the first month-on-month expansion in oil consumption in the month of August since 2005. In September, demand for diesel shrank 11.4 percent to 5.22 million tons, shrinking for the first time year-on-year since July 2015. Gasoline demand declined 3.4 percent to 1.82 million tons, the first decline since May 2014..