India’s Oil Demand: Don’t Let Oil Imports Numbers Fool You!

With Three Charts and a table

The News

Crude oil imports at record 21.8 million tonnes in May

“The world’s third largest importer procured 21.8 million tonnes (MT) of crude oil last month provisionally, a growth of 2 per cent M-o-M and 6 per cent Y-o-Y. In-bound shipments of the critical commodity rose for the fourth consecutive month during May, according to Petroleum Planning & Analysis Cell (PPAC) data.”

According to Kpler, India’s total oil imports increased in May by 3.3% Year-on-Year, as shown in Figure (1) below. They also increased MoM by 1.37%.

But the strong growth in imports may not mean strong growth in oil consumption, which is also a proxy for economic growth.  Here is why: