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India cuts 2017/18 fuel demand growth estimate to 4.5%

[NEW DELHI] India has cut its annual fuel demand growth estimate to 4.5 per cent for 2017/18 from 5.8 per cent, government data showed, indicating slower economic activity.

The new forecast puts fuel demand growth at its slowest pace in three years.

India, the world's third biggest oil consumer, is expected to consume 203.4 million tonnes of refined products in the year to March 2018, data posted on the website of the petroleum ministry's Petroleum Planning and Analysis Cell showed.

Introduction of a new tax regime had dented India's economic growth earlier this year. The country's central bank estimates the economy to grow at 6.7 per cent in this fiscal year, its slowest pace in four years.

Gasoline consumption is seen growing at 9.8 per cent, higher than the previous year, the data showed, reflecting a likely 9 per cent rise in passenger vehicle sales.

Diesel demand is estimated to recover and grow by 5.8 per cent, compared to a 1.8 per cent rise in the last fiscal year, mainly due to rising construction activity and local manufacturing.

India is promoting use of liquefied petroleum gas, used for cooking, to replace kerosene and that would raise sale of the cleaner fuel.