Fuel demand, capacity addition by refiner likely to inflate oil import bill

Demand for all fuels rose 5 per cent in the April-December period to 148 mt from a year earlier, according to the oil ministry

India must be prepared for a big, fat fuel import bill in FY23 — barring any further avatars of the Covid virus — as refiners crank up runs, or crude processing rates, to meet the growing demand for fuels, and crude prices soar. Capacity additions by an Indian state-run refiner will reinforce the need for foreign crude.

Demand for all fuels is expected to increase by 3-8 per cent next fiscal from 2021-22, reaching pre-pandemic levels, according to analysts and industry experts. Petrol use is forecast to increase 5-9 per cent and diesel consumption 2-6 per cent. Only aviation fuel is