India's fuel demand slipped to its lowest in over two years in September after a fall in diesel and industrial fuel consumption negated the rise in petrol and LPG consumption.
Consumption of petroleum products in September dropped to 16.01 million tonnes, its lowest since July 2017, from 16.06 million tonnes in the same month last year, according to data from the Petroleum Planning and Analysis Cell (PPAC).
Also, the government is looking at private investment to raise domestic oil and gas production, which has stagnated for the last few years while fuel demand has been rising by 5-6 percent annually.
The Prime Minister in 2015 had set a target of reducing India's oil dependence by 10 percent to 67 percent (based on import dependence of 77 percent in 2014-15) by 2022. Import dependence has only increased since then and the government is now looking for ways to raise domestic output.
India is the third-largest importer of crude oil and rising international crude oil prices are inflating domestic transport fuel rates in a strong demand environment. Also, the country is dependent on imports to meet its 83 percent of the demand and more than half of its natural gas requirements
Anish De, National head energy and national resources, KPMG India and Santhosh Jayaram of KPMG India shared their views and outlook on crude oil and renewable sector on Commodity Champions.