India's domestic output is constant in FY24 despite a 4.6% increase in oil demand

India's domestic output is constant in FY24 despite a 4.6% increase in oil demand

From 29.2 MMT the year before to 29.4 MMT in FY24, domestic crude oil output remained almost constant. Conversely, as the nation obtained 87.7% of its oil needs from outside sources, India's crude oil imports for the year were at an all-time high.

India satisfied 87.7% of its oil needs from supplies from foreign nations, making its crude oil imports the highest of the year.

India's domestic production was constant in the fiscal year 2023–24 (FY24), while the country's consumption of petroleum products climbed by 4.6 percent to 233.3 million metric tons (MMT).

A recent report from the oil ministry states that, aside from LPG, lubes, bitumen, petcoke, and LDO, the largest increases in petroleum production consumption (a measure of oil demand) in FY24 were 6.4 percent for motor spirit (MS), or petrol, 4.4 percent for high speed diesel (HSD), 11.8 percent for ATF, and 14.3 percent for naptha. The prior year had 223 MMT of product consumption.

In contrast, domestic crude oil output in FY24 was 29.4 million tons, almost unchanged from the previous year's 29.2 million tons. Conversely, as the nation obtained 87.7% of its oil needs from outside sources, India's crude oil imports for the year were at an all-time high. By contrast, in FY23 and FY22, India's reliance on crude oil imports was 87.5 percent and 87.4 percent, respectively.

Due to restricted supplies from the Organization of Petroleum Exporting and its allies (OPEC+) and geopolitical concerns in the Middle East, India's greater reliance on imports of crude oil presents a difficulty for the nation.

The Indian government has been pressuring the nation's oil explorers, ONGC and Oil India Limited (OIL), to increase output in order to protect the nation from increasing oil costs. The biggest oil and gas explorer in India, ONGC, wants to progressively increase output by FY25 by reversing years of falling production. To this end, the company is focusing on additional output from its Krishna Godavari (KG) basin. It is anticipated that the KG basin production surge would result in an 11% rise in the company's total oil output and a 15% increase in its gas production.

Regarding the crude trade, India has expanded the range of nations from which it purchases crude oil, having previously purchased from 29 to 37. The purpose of this decision is to guarantee the cheap supply of electricity in India. Prior to 2022, Russia supplied just 0.2 percent of India's entire oil demand; now, it contributes almost 30 percent of the country's total petroleum imports.