NEW DELHI: Indian oil refineries will see their profits decline in the next financial year, according to a report by Fitch Ratings. The main reasons for this decline are lower prices for petroleum products, a surplus of these products in the region, and reduced benefits from fluctuations in global crude oil prices.
This decline is attributed to lower prices for petroleum products, oversupply in the region, and reduced benefits from fluctuations in global crude oil prices.
However, oil marketing companies (OMCs) are expected to maintain healthy marketing margins, thanks to lower Brent crude oil prices and a forecasted 3-4% increase in India’s petroleum product demand in financial year 2024-25 (FY25).
“Fitch Ratings expects India’s petroleum product demand to rise by 3-4% in the financial year ending March 2025 (FY25), compared with increases of 3% in 7MFY25 and 5% in FY24. This is supported by rising consumer, industrial and infrastructure demand…The growth in petroleum product demand is likely to be broad-based, with diesel and petrol accounting for the majority,” reads the report.
The report also noted that India’s total gas consumption is expected to increase by around 10% in the financial year 2025 (FY25), driven by growing demand from key sectors and government policies promoting the use of cleaner fuels.
Natural gas production in India is expected to grow at a low single-digit rate in FY25, supported by development projects on the western and eastern coasts. However, this growth rate is slower than the 9% compound annual growth rate (CAGR) seen between FY21 and FY24.
Liquefied Natural Gas (LNG) imports are expected to increase by around 20% in FY25, driven by growing demand and lower international gas prices. This will make gas more affordable for price-sensitive sectors.