Indian oil demand picked up in October, rising y/y by 196 thousand b/d (6.5%) to 3.225 mb/d, a record high for October. In the year-to-date, Indian oil demand is running higher y/y by a solid 167 thousand b/d (5.5%). The bulk of the growth, again, came from diesel, which increased y/y by 88 thousand b/d (6.8%) to 1.380 mb/d, although growth has eased from the highs seen in Q2 and early Q3 when a poor monsoon boosted diesel's usage in agriculture. Diesel continues to be supported by expansion in industrial production and rising use in the automobile sector, despite the price hike of Rs. 5 in September, as running costs of a gasoline car are still twice those of a diesel car. Meanwhile, gasoline demand growth picked up to 6% y/y, boosted by rising car sales. Indeed, October car sales were boosted by strong seasonal buying, hitting a 22-month high and higher y/y by 23% and m/m by 4.7%. However, the strength is likely to have been distorted somewhat by stockpiling ahead of the festive season. Given that car sales declined by 19% y/y in August and 5.4% y/y in September, more than one-month's data would be required to confirm whether the trend has finally turned. Naphtha demand was higher y/y by 2%, while fuel oil demand fell by 11%, slightly less than the year-to-date decline of 15%.
The continued weakness in domestic production and record high refinery runs (up y/y by 16.5% to 4.528 mb/d) buoyed crude oil imports in September, which increased by 0.4 mb/d (14.2%) to 3.463 mb/d, yet India returned to severe destocking mode. The increase in runs was led by Essar's Vadinar refinery (up by 0.35 mb/d), followed by BPCL's Bina refinery and ONGC's Mangalore refinery (higher y/y by 0.13 mb/d and 0.11 mb/d respectively).