India has cut its annual fuel demand growth estimate to 4.5 percent for 2017/18 from 5.8 percent, government data showed, indicating slower economic activity.
The new forecast puts fuel demand growth at its slowest pace in three years.
India, the world’s third biggest oil consumer, is expected to consume 203.4 million tonnes of refined products in the year to March 2018, data posted on the website of the petroleum ministry’s Petroleum Planning and Analysis Cell showed.
Introduction of a new tax regime had dented India’s economic growth earlier this year. The country’s central bank estimates the economy to grow at 6.7 percent in this fiscal year, its slowest pace in four years.
Gasoline consumption is seen growing at 9.8 percent, higher than the previous year, the data showed, reflecting a likely 9 percent rise in passenger vehicle sales.
Diesel demand is estimated to recover and grow by 5.8 percent, compared to a 1.8 percent rise in the last fiscal year, mainly due to rising construction activity and local manufacturing.
India is promoting use of liquefied petroleum gas, used for cooking, to replace kerosene and that would raise sale of the cleaner fuel.>