NEW DELHI: India's petroleum product demand to stay moderately strong in the fourth quarter of FY22 as easing of COVID-related curbs boosts economic activity, says Fitch Ratings. The rating agency, however, mentioned that recovery expectations remain subject to further restrictions due to the risk of a resurgence of COVID cases in India with the emergence of new variants.
"We expect the economic recovery to support higher throughput at Indian oil marketing companies - Hindustan Petroleum Corporation Limited, Indian Oil Corporation Ltd and Bharat Petroleum Corporation Limited - and at refineries, such as, HPCL-Mittal Energy Limited," said the rating agency.
The agency expects improved demand to reach pre-pandemic levels in 4QFY22, but the full financial year’s demand is still 2-4 per cent below that in FY20.
In its 'India Oil & Gas Watch' report, Fitch said that capex is likely to stay high as oil marketing companies expand their refining capacity and retail networks, and upstream companies enhance production. "We expect stable crude oil production, which should marginally increase in FY23 as upstream producers continue to invest in exploration and development," he said.