[Source: Reuters]

India’s fuel demand hit its highest level in at least 24 years in February, data showed on Thursday, with industrial activity in Asia’s third biggest economy boosted by cheap Russian oil.

Consumption of fuel, a proxy for oil demand, rose by more than 5% to 4.82 million barrels per day (18.5 million tonnes) in February, its 15th consecutive year-on-year rise, data showed.

Demand was the highest recorded in data compiled by the Indian Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC) going back to 1998.

The strength highlights a combination of profitable refining from record Russian crude imports in February, total utilization for primary distillation across India and still-robust domestic consumption, said Viktor Katona, lead crude analyst at Kpler.

Katona forecasts demand in March at 5.17 million barrels per day (bpd) and then the seasonal monsoon-driven slowdown will lead to it to drop to 5 million bpd in April-May.

Sales of gasoline, or petrol, rose 8.9% year-on-year to 2.8 million tonnes in February, while diesel consumption climbed 7.5% to 6.98 million tonnes.

Sales of jet fuel jumped more than 43% to 0.62 million tonnes, the data showed.

“For 2023, the strongest demand growth rate is projected to be in jet fuel, followed by gasoline and then diesel/gas oil,” said Alan Gelder, VP Refining, Chemicals and Oil Markets at Wood Mackenzie.