Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list

Outlook 2019: India's oil sector hopes for policy continuity in election year

Commodities | Agriculture | Biofuels | Oil | Refined Products | Gasoline

APPEC: US ethanol eyes new markets amid increased US-China tensions


Platts Market Data – Oil

NGL | Oil | Crude Oil | LPG | Oil Risk | Petrochemicals

Platts University New York

Oil | Crude Oil

Factbox: Attacks on Saudi oil units affecting major Asian crude buyers differently

Outlook 2019: India's oil sector hopes for policy continuity in election year

Singapore — Lower crude oil prices have improved the outlook for India's oil demand growth in 2019, but the pace of rise will largely hinge on the continuity of energy reforms and economic policies pursued over the past four years, as the country gears up to hold federal elections.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Oil analysts told S&P Global Platts that it's crucial that some key initiatives of the government -- such as building roads, industrial infrastructure, expansion of LPG network, as well as plans to boost the airport network -- continue in the same pace after the polls, for oil demand to maintain the growth momentum.

"Lower oil prices will help India's oil demand in 2019, but the sector will be keeping a close eye on elections to see whether the policies continue in the same pace," said Lim Jit Yang, director of Asia-Pacific oil market analysis at S&P Global Platts Analytics.

Platts Analytics expects India oil products demand growth of around 260,000 b/d in 2019, compared with an estimated growth of 195,000 b/d in 2018.

India, which imports about 80% of its crude oil needs, will be holding federal polls some time around the middle of the year. Market observers will be closely watching if the ruling National Democratic Alliance government, led by the Bharatiya Janata Party, will get a second term in office.

In the past four years, the government has introduced a series of energy policy reforms. It has removed subsidies on diesel prices and aligned retail fuel prices with international crude prices.

While it has aggressively pushed the use of LPG across the country, New Delhi has also given the go-ahead to state-owned refiners to gradually raise the price of kerosene, which once accounted for more than 40% of overall petroleum subsidies. Even the upstream sector has also attracted investment from private and overseas companies.

"We are still positive on the India oil demand growth story, but there will be some uncertainties. It's an election year. We are hoping that the pro-infrastructure policies will continue," said Amrita Sen, chief oil analyst at Energy Aspects.

"We are expecting Indian oil demand to grow by about 200,000 b/d in 2019, about the same level as in 2018. Lower oil prices will help to some extent," she added.


Over the January-November period, oil products demand rose 5% year on year to around 192 million mt, or 4.5 million b/d, data from the Petroleum Planning and Analysis Cell showed.

In the first 11 months, diesel demand rose 4.1% year on year to 75.3 million mt, while gasoline demand rose 9.9% to 25.4 million mt. LPG demand grew by 6.1% year on year to 22.05 million mt, while jet fuel demand rose 11.1% year on year to 7.46 million mt over the same period.

"Although the ruling BJP party faced setbacks in three key state elections recently, a lack of strong opposition and the introduction of a slew of schemes ahead of the general election could likely give Prime Minister Narendra Modi a second term," said Senthil Kumaran, consultant at Facts Global Energy.

"This is seen as essential for the endurance of the strength in Indian oil demand growth as policies continue to play a key role in shaping the country's oil consumption," Kumaran added.

Government policies will continue to steer LPG growth, albeit at a slower pace, in 2019 as LPG penetration had crossed a national average of 88%, compared to less than 60% in 2016, Kumaran said. It will soon reach a saturation point, meaning relatively lesser year-on-year additions of new LPG connections in coming years.

"Strong demand for jet fuel will continue to be supported by expectations of lower crude prices and resilient expansion in the country's air infrastructure," he added.


On the crude oil outlook, one of the biggest concerns is whether India would be able to continue importing Iranian oil after its first waiver from Washington expires in March.

Iranian crude exports to India have been robust before the current US sanctions were implemented on Iran in November 2018. More than 600,000 b/d of Iranian crude was shipped to India in September, while inflows were nearly 500,000 b/d in October, according to analysts and data from cFlow, Platts trade flow software.

Analysts expect Indian crude imports from Iran to average about 300,000-350,000 b/d during the waiver period until March.

"We are expecting imports from Iran to India to fall by another 50% from current levels, after the next set of waivers, but we don't see inflows falling to zero," Energy Aspects' Sen said, reiterating views from senior Indian government and refinery officials that India won't be able to manage with zero Iranian imports.

India imported 17 million mt, or 4.2 million b/d, of crude oil in November, down 11.4% year on year, PPAC data showed. Crude imports were also down 19.4% from October levels. In the first 11 months, crude imports rose 5.4% year on year to 207.8 million mt.

"Crude demand will be softer in the early part of the year because of refinery maintenance schedules but it should show healthy growth over the entire year," Sen said.

-- Sambit Mohanty,

-- Edited by Irene Tang,