India’s state-owned refiners are expected to raise imports of light crude oil as they anticipate higher gasoline demand around the festival season, analysts said. Indian refineries were designed to process Middle Eastern heavy oil grades to produce diesel. However, Indian customers are switching from public transportation to private vehicles to avoid the risk of COVID-19 infection. Moody’s forecasts India’s gasoline demand to increase by 14% to a record 31.9 million tons in the fiscal year ended March 2022.
As a result, refiners are expected to cut imports of heavy sour crude grades from the Middle East while raising purchases of lighter gasoline-yielding crudes such as US WTI Light, WTI Midland, Nigeria’s Akpo, and Kazakhstan’s CPC Blend. This plan will be in line with India’s efforts to cut dependence on Middle Eastern oil supplies. Analysts said West African crude oil would account for around 20% of India’s imports in the next few months, rising from about 10%-17% currently. Meanwhile, the Middle East’s share is expected to shrink to below 60% from about 65%.
