Indian oil demand rose by 60 thousand b/d y/y—the slowest pace in a year—to 4.30 mb/d in September, led by LPG (+49 thousand b/d) and gasoline (+25 thousand b/d). Monsoon rains continued deep into September in parts of India (unlike in 2017), forcing diesel demand lower by 12 thousand b/d y/y. Agricultural activity, construction and driving were also restricted by flooding, particularly in the south. As a result, demand for the main four products grew by just 14 thousand b/d y/y on average, the slowest in four months. September gasoline demand growth slowed on a mixture of lower domestic passenger car sales (-5.6% lower y/y) and higher insurance premiums and recent price hikes by auto manufacturers. Combined jet/kero demand totalled 0.25 mb/d, flat y/y. Kerosene demand fell y/y by 13 thousand b/d after turning positive y/y in August for the first time since December 2014. India’s domestic air passenger traffic grew by 22.6% y/y in August supporting double-digit demand growth recently. LPG demand bounced back from a weak August to hit 0.81 mb/d in September, as LPG cylinders that were lost during the recent floods in the south were replaced.
Refinery runs ticked up m/m to 5.1 mb/d (+64 thousand b/d y/y). The Bina refinery was offline for the whole month (-0.15 mb/d y/y), offset by higher y/y processing rates at Mathura (+0.1 mb/d) and Mangalore (+64 thousand b/d). BPCL’s Mumbai refinery outage is set to continue for a while, with the hydrocracker to remain offline until December, while its Kochi refinery is facing problems at its HDS unit which will reduce diesel exports. Crude stocks drew marginally.