With 6 per cent growth, India to surpass China as fastest-growing oil market in Asia

India will outshine China as the fastest-growing petroleum product market in Asia on the back of a 6 per cent demand growth says a report. This seems possible as Chinese stipulated growth is seen halving to 2.5-3% in 2017-18 from a higher 6% in 2016-16.

Created On: Oct 4, 2017 11:15 IST
With 6 per cent growth, India to surpass China as fastest-growing oil market in Asia
With 6 per cent growth, India to surpass China as fastest-growing oil market in Asia

India will outshine China as the fastest-growing petroleum product market in Asia on the back of a 6 per cent demand growth says a report. This seems possible as Chinese stipulated growth is seen halving to 2.5-3% in 2017-18 from a higher 6% in 2016-16.

Despite the failing growth numbers in both these countries, India and China will maintain to be the key growth engines for the sector in Asia, representing over 80% of the expected growth in 2018.

Highlighting the American energy information administration projections, the report said that the demand for petroleum products in the Asia Pacific will increase a modest 2% or 0.7 million barrels per day to 34.6 million bpd in 2018.

The report said that the seeing the oil sectors dependence on China and increasingly India, it is believed that demand would face considerable threat if economic growth weakens materially below our expectations.

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However, India will outshine China as the fastest growing product market in Asia with petroleum consumption growing 6 % in 2018.

It also says India and China growth will make sure that Asian refining margins will stay firm, thereby supporting the earnings growth.

On China, the report says that as China’s economic activity dials back, we anticipate its refined product demand growth will modest to 2.5-3% in 2017-18 which is nearly half of higher CAGR of 5% in 2012-16. Still, in absolute terms, China will account for 48% of Asian R&M demand growth in 2018.

Noting that demand and supply will vary by country, as a whole Asia’s incremental growth in demand for fuel of around 0.7 million bpd will outpace net refining capacity additions of 0.4-0.5 million bpd over the next 12-18 months.

The report concluded with the remarks that at the same time, the bulk of the incremental growth in refining capacity will come from China and Vietnam. However, with demand growth exceeding capacity additions over the last 5-years, Asia is likely to be a net importer of refined petroleum products over at least the next 3-years.

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