India’s oil and gas sector sees declines in production, consumption and imports in April

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Decline in the oil and gas sector

Highlights

Total petroleum product output fell 1% to 116.08 MMT and consumption fell 5% to 95.50 MMT in April–August 2023.
Total crude oil processing fell 0.04% to 113.01 MMT, with a 27% decline at NEL Vadinar putting private refinery throughput under considerable pressure.
Total oil imports fell 9% to 111.60 MMT, petroleum product exports fell 16% to 21.52 MMT, and natural gas consumption declined 2% to 28,607 MMSCM.

This article was translated from the original. Read the original version by our correspondent here.

Operating trends in April–August

According to the monthly bulletin from the Petroleum and Natural Gas Regulatory Board, total petroleum product output falls 1% year on year to 116.08 MMT, while total consumption declines 5% to 95.50 MMT. The drop in output is mainly linked to lower production of MS, HSD, ATF, bitumen, LDO, SKO and petroleum coke, although LPG, lubes and LSHS record notable increases.

On the consumption side, declines in LPG, bitumen, LDO, naphtha and petroleum coke contribute to the overall weakness. By contrast, consumption of the major transport fuels rises 7% for motor spirit and 5% for high-speed diesel, while ATF consumption is nearly flat, up 0.5%, and consumption of FO and LSHS increases 10%.

Total crude oil processing slips 0.04% to 113.01 MMT. A 3% decline at private-sector refineries, particularly a 27% drop at NEL Vadinar, weighs on overall processing, while PSU refineries record a 1% increase to 72.40 MMT and JV refinery throughput rises 13%.

Among the major refinery groups, IOCL records a 1% increase, supported by higher throughput at Koyali and Digboi. HPCL and the JV, CPCL, NRL and RIL show mixed trends, indicating that weaker throughput in the private sector is the main driver of the overall decline.

Impact on trade flows and demand

On the oil trade front, total imports decline 9% to 111.60 MMT, mainly due to a sharp 50% drop in petroleum product imports; crude oil imports also fall 0.4%. Petroleum product exports decline 16% to 21.52 MMT, and net oil imports fall 7% to 90.07 MMT.

In the natural gas segment, gross and net production fall 4% to 14,074 MMSCM and 13,884 MMSCM, respectively, reflecting lower output in both onshore and offshore areas. Total natural gas consumption also declines 2% to 28,607 MMSCM over the same period. This indicates that energy demand is not weakening across the board, although caution persists in industrial and broader fuel use.

Our previous report on bringing fuel under GST noted that the central government was considering the possibility, but that state consent would be a decisive condition for moving ahead. The article also highlighted that there was considered to be limited scope for major changes to existing GST rates, and that the government was focusing on institutional steps—such as expanding the taxpayer base and setting up a 12-member standing committee of the GST Council—rather than changing rates.

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