India petroleum product exports are likely to fall in October-December from a record July-September quarter, BusinessLine reports, citing industry sources. Rising diesel demand at home will leave less fuel to ship abroad.
Why India petroleum product exports may slip
Last quarter, a global diesel shortage helped Indian refiners. Petroleum’s share of India’s gross exports averaged 11.2%, the highest in 12 quarters, according to PPAC data. In total, refiners shipped 15.1mn tonnes of fuels such as diesel and jet fuel.
However, the trend is already turning. The share fell to 10.9% in September, compared with 11.2% a year earlier. Meanwhile, industry, mining, freight and farm use should lift diesel demand. The festive and wedding season will add to it.
Stable pump prices keep demand up
Kpler says Indian refineries have run at over 100% utilisation this year. Also, Indian retail diesel prices have barely moved, unlike in Western markets. As a result, demand at home has held up.
Still, exports only soften the blow of costly crude. In July-September, India’s crude and fuel import bill was $47.4bn. By contrast, export earnings were $14.8bn, covering a little over 31% of it.
For more on the diesel squeeze, read our analysis of the US heating oil reserve release.
