Date:02/12/2008 URL: http://www.thehindu.com/2008/12/02/stories/2008120255891600.htm

Business

Oil demand drops on slow industrial activity

Special Correspondent

Crude imports up 13 % at 11.365 million tonnes in October

Rise in China’s
oil consumption
Reliance steps up crude purchases

NEW DELHI: Even as oil marketing companies (OMCs) have started making huge profits on the sale of petrol and diesel due to continued decline in international crude oil prices, there was a cause for concern with domestic oil product sales reporting a decline in October for the first time in 17 months indicating slowing of down economic activity. After a long period, demand for industrial fuels and diesel crippled during October, according to government data released on Monday. Oil product sales, a proxy for demand, fell 1.7 per cent from the same month a year ago to 10.71 million tonnes as diesel consumption slowed to its lowest level since June, when India raised auto fuel prices by up to 10 per cent.

Officials said that the fall in demand stands in contrast to Asian rival China, where oil consumption grew 4.3 per cent in October. India’s petrol sales in October were up 10.1 per cent (annual) at 9.36 lakh tonnes. Diesel sales grew at an annual 6.4 per cent to 4.24 million tonnes, compared with double digit growth recorded in the previous month, on lower offtake by industrial users coming as relief to the OMCs.

The country’s crude imports during the month were up 13.2 per cent at 11.365 million tonnes on higher purchases by private refiners.