India, a significant buyer of Nigerian crude, which is largely light and sweet, rich in gasoline and diesel and low in sulfur, recorded the most significant monthly drop in oil demand since May 2003, as the government’s crackdown on high-value currency notes continued to reverberate through the country’s $2 trillion economy, Bloomberg reports.
Fuel consumption fell 4.5 percent to 15.5 million tons in January from 16.2 million tons a year ago, the Oil Ministry’s Petroleum Planning and Analysis Cell said Friday. Diesel use, which accounts for about 40 percent of total fuel demand in India, dropped 7.8 percent to 5.8 million tons, the biggest decline since September. Gasoline consumption fell the most since June.
India imports more than 80 percent of its crude requirement and the International Energy Agency expects it to be the fastest-growing consumer through 2040. State-owned refiners like Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd, (HPCL) are major regular buyers of Nigerian crude like Qua Iboe, Bonny Light, Escravos, EA Blend, Erha, Usan and Agbami.
However, expansion in the world’s fastest-growing major economy is under pressure after Prime Minister Narendra Modi in November withdrew high-value currency notes in a country where almost all consumer payments are in cash. Growth in gross domestic product may slow to 6.5 percent in the year through March from 7.9 percent the previous year, according to an Economic Survey presented by the finance minister’s advisers.