Key facts
- India's oil demand growth forecast has been reduced to its lowest point since the pandemic.
- Analysts have cut gasoline and diesel demand growth forecasts by 30% to 90%.
- India plans to expand E85 fuel stations to 500 by year-end, up from approximately 50.
- Minister Hardeep Singh Puri predicts faster adoption of E85 than E20 due to lower prices.
- Nayara Energy completed maintenance at its 400,000-bpd Vadinar refinery.
- The Vadinar refinery processes Russian crude oil.
- Nayara Energy plans to boost domestic fuel supply to avoid potential EU sanctions from summer 2025.
- Satellite data shows a slowdown in Indian industrial activity.
- Reduced nitrogen dioxide emissions were observed in at least four industrial clusters.
- The industrial slowdown is linked to the ongoing conflict involving Iran.
Analysts have significantly lowered India's oil demand growth projections for the current year, anticipating the slowest expansion since the COVID-19 pandemic. This downward revision stems from a combination of supply shortages and elevated fuel prices, which are dampening demand for gasoline and diesel. Kpler and Rystad Energy, two prominent energy analysis firms, have each reduced their gasoline and diesel demand growth forecasts by a substantial 30% to 90%.
In parallel, India is actively expanding its network of E85 fuel stations, with plans to increase their number to 500 by the end of the year, a significant jump from the current approximately 50 stations. Union Minister Hardeep Singh Puri has expressed optimism that E85 will see faster adoption than the E20 fuel. He attributes this prediction to E85's more affordable price point, which is expected to encourage consumers. The broader goals behind this initiative include reducing the country's reliance on oil imports and curbing vehicular emissions.
Meanwhile, Nayara Energy, a major Indian refiner, has successfully completed scheduled maintenance at its Vadinar refinery. This facility has a substantial processing capacity of 400,000 barrels per day and processes Russian crude oil. Following the maintenance, Nayara Energy intends to increase its domestic fuel supply. This move is partly aimed at mitigating potential impacts from European Union sanctions, which are anticipated to take effect starting in the summer of 2025.
Furthermore, satellite data analysis conducted by NDTV Datafy indicates a noticeable slowdown in industrial activity across India. The analysis has observed reduced levels of nitrogen dioxide emissions in at least four major industrial clusters. This industrial slowdown is reportedly linked to the ongoing conflict involving Iran, suggesting potential ripple effects on global supply chains and industrial operations.