(Repeats with no changes. John Kemp is a Reuters market
analyst. The views expressed are his own)
* Chart 1: tmsnrt.rs/2pF4Bso
* Chart 2: tmsnrt.rs/2pFeqqf
By John Kemp
LONDON, May 12 India's gasoline consumption has
flattened out in recent months after tremendous growth between
2014 and 2016.
India's motorists consumed 581,000 barrels of gasoline per
day between February and April, according to the Petroleum
Planning and Analysis Cell at the Ministry of Petroleum and
Gasoline consumption rose by 4 percent compared with the
same period a year earlier, a sharp slowdown from the 14 percent
increase between 2015 and 2016 (tmsnrt.rs/2pF4Bso).
Gasoline consumption growth has been slowing since the
middle of 2016 after surging for the previous two years (tmsnrt.rs/2pFeqqf).
Consumption growth for most other fuels used for cooking and
transportation has also been slowing for the last nine months.
Demand for liquefied petroleum gas and kerosene used for
cooking, heating and lighting as well as diesel used for
transport all show signs of levelling off or actually falling in
the first four months of 2017.
The slowdown may have been compounded by the demonetisation
of large-denomination bank notes announced at the start of
November as part of the government's anti-corruption campaign.
Demonetization resulted in a sharp slowdown in sales of the
cheaper motorcycles favoured by first-time buyers in rural
Rapid expansion in motorcycle ownership has been one of the
major factors driving increases in gasoline demand ("India's new
motorcycle owners drive gasoline boom", Reuters, Sept. 2016).
Rising crude oil and refined fuel prices over the last year
are also likely to have constrained the growth in consumption
and other fuels.
Retail gasoline prices rose by around 10 percent between
January 2016 and January 2017 while diesel prices climbed by
almost 8 percent, according to data from the Ministry of
Petroleum and Natural Gas.
India's emerging urban and rural middle class is relatively
sensitive to increases in the cost of fuel so rising prices have
curbed demand growth.
Despite the recent slowdown in consumption growth for
gasoline and other fuels it is too early to determine whether
the deceleration is temporary linked to demonetization and price
rises or something more lasting.
But India has been one of the most important sources of oil
demand growth during the slump so any prolonged slowdown in
consumption growth would make the task of global market
(Editing by David Evans)