India trims 2012/13 fuel demand forecast on slow growth

NEW DELHI Wed Jan 9, 2013 2:43pm IST

An employee fills a taxi with diesel as her colleague clean the windows of the car at a fuel station in Kolkata September 19, 2012. REUTERS/Rupak De Chowdhuri/Files

An employee fills a taxi with diesel as her colleague clean the windows of the car at a fuel station in Kolkata September 19, 2012.

Credit: Reuters/Rupak De Chowdhuri/Files

Related Topics

NEW DELHI (Reuters) - India cut its forecast for fuel demand in the current fiscal year by nearly 1 percent to 155.6 million tonnes, government data showed, due to a slowdown in economic activity.

The economy, which grew at 6.5 percent in the year ended March 2012, is expected to grow 5.7 percent to 5.9 percent this fiscal year, the slowest since 2002/03.

Local fuel sales -- a proxy for oil demand in India -- are now expected to grow at 5.2 compared with 5 percent in the previous fiscal year, when India consumed 148.13 million tonnes of fuel, according to data released by the Petroleum Planning and Analysis Cell (PPAC), a unit of the oil ministry.

PPAC had earlier projected India would consume 157.07 million tonnes of refined oil products this fiscal year, a growth of 6.1 percent over 2011/12.

PPAC has halved its projection for growth in demand of liquefied petroleum gas (LPG) in this fiscal year to 5.6 percent as the use of the fuel has decreased after India capped sale of subsidised cooking gas cylinders at six per household.

Diesel accounts for over 40 percent of refined fuel consumption in India and according to the latest PPAC estimate, demand for the fuel is set to rise 8.3 percent compared with a previous projection of 5.9 percent as it is considerably cheaper than petrol.

India, which imports more than 80 percent of its fuel needs, liberalised petrol prices in June 2010 but continues to regulate diesel prices to protect the poor.

Prime Minister Manmohan Singh recently said India must gradually bring local fuel prices in line with global prices. He also called for creating public awareness on the need for curbing energy subsidies.

(Reporting by Nidhi Verma; editing by Miral Fahmy)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Jan Dhan Yojana

REUTERS SHOWCASE

Chance For Reform

Chance For Reform

India's coal crunch - a chance to revamp, reallocate and revive.  Full Article 

E-Commerce

E-Commerce

Ratan Tata invests in online retailer Snapdeal.  Full Article 

Top Priority

Top Priority

Finance minister says food inflation is top priority.  Full Article 

Deal Talk

Deal Talk

Who wants to buy Snapchat? Microsoft, Google, Apple, Alibaba.  Video 

Fresh Funding

Fresh Funding

Tiger Global leads $65 million funding in Indian messaging app Hike.  Full Article 

GDP Preview

GDP Preview

Economy likely grew faster in June quarter: Reuters poll.  Full Article 

Safety Net

Safety Net

SEBI revamps trading safety-net rules.  Full Article 

Fraud Investigation

Fraud Investigation

IMF's Lagarde put under investigation in French fraud case.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage