India’s oil demand growth rate to eclipse China’s

TIL Desk Business/New Delhi/ India’s oil consumption is expected to 7-8 per cent this year, outpacing China’s demand growth for the third consecutive year, as impact of demonetisation is likely to be short-lived. LPG and transport fuels demand will rise, while new petrochemical projects would a boon for naphtha demand.

“The dramatic rise in India’s oil demand shows no signs of faltering… the country will remain a driver of Asian growth in 2017,” Platts Analytics said in a note. The cash crunch following move to demonetise 86 per cent of currency is expected to “temporarily dampen the country’s appetite for oil products in the first quarter, or maybe a little longer,” it said.

“But gains in oil demand that the country is set to achieve from the ‘Make in India’ initiative — which aims to raise the share of manufacturing in GDP over the next few years — will more than offset the negative effects of demonetisation,” Platts quoted analysts as saying.