According to official data released on Monday, India's imports of crude oil decreased by more than 13% from August to August as the third-largest oil user in the world experienced limited activity and sluggish consumption.
The amount of crude oil imported in July decreased to 17.55 million tonnes in August, according to information from the Petroleum Planning and Analysis Cell's website. But imports rose by 0.9% in August compared to the same month last year.
According to Prashant Vasisht, vice president and co-head of corporate ratings at ICRA, the demand for industrial fuels like diesel normally declines during the monsoon season due to factors including decreased mobility and a reduction in consumption in the irrigation sector.
India received 3.4% more rainfall than average in August, particularly in the central and southern parts of the country.
Fuel imports decreased by almost 94% month over a month last month to reach 0.01 million tonnes, while figures earlier this month revealed that diesel sales in August fell to their lowest level of the year.
"However, the festival and wedding season should boost demand moving forward. more products must be transported as a result "Vasisht threw in.
On a yearly basis, oil product imports increased 13.7% to 3.63 million tonnes in August, while exports ascended about 9%. Of the 5.23 million tonnes of exports in August, diesel accounted for 2.36 million tonnes.
Further, the expected seasonal drop in industrial output has also resulted in a gradual inventory build-up of crude oil with refiners over the last couple of months and led to a sharp decline in crude imports in August, expressed Hetal Gandhi, Director, CRISIL Research.
"With the crude oil production base mainly made of old declining fields, domestic crude oil production is predicted to remain range-bound or decline marginally for the full year, thus resulting in a continued reliance on crude oil imports to meet demand," Gandhi added.
India, Asia's third-biggest economy, holds excess refining capacity and exports refined fuels as well.
Meanwhile, separate data showed Saudi Arabia appeared as the second-biggest oil supplier to India after a three-month gap in August, overtaking Russia by a thin margin.
NOTE: The data for Import Exports
is preliminary because private refiners share numbers of their choice.