New Delhi : After growing at a robust 7.8 per cent in first quarter, India’s fuel consumption growth is likely to moderate at around 5-6 per cent in the current fiscal, Fitch Ratings said today.
“Fitch Ratings expects consumption growth for petroleum products to remain strong over the medium term,” it said in a report.
Consumption increased by 7.8 per cent in the first quarter of the current fiscal as compared with 10.9 per cent in FY2015-16. “We expect growth to moderate to around 5-6 per cent in FY17 and thereafter,” it said. “We also expect continued strong gasoline (petrol) consumption growth of around 9-10 per cent over the medium term, supported by robust passenger- vehicle sales amid low crude-oil prices,” the report said. Fitch expected that an improvement in India’s GDP growth is likely to boost demand for diesel.
It said higher refining capacity will boost refining volume and meet rising demand for refined products in the next 12-18 months, mainly driven by the 2016 expansion of three state-owned oil marketing companies — Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL). “This should reverse the fall in exports by FY2016-17,” it said, adding exports fell by 5.3 per cent in 2015-16 and by 5.9 per cent in the previous year. “Fitch believes gross refining margins (GRM) of all Indian oil refining companies will moderate in FY2016-17 from the strong levels achieved in 2015-16.
