NEW DELHI: India's fuel consumption grew 6.7% in May over that a year ago, reflecting greater use of cars and increased air traffic in an expanding economy, while crude oil production fell 3.3%, increasing import dependence to 81.9% from 81.3%.

In May, India consumed 9.4% more diesel and 16.7% more petrol than it did a year ago, the latest data released by the oil ministry's Petroleum Planning & Analysis Cell shows. Aviation turbine fuel consumption grew 20% as lower prices and holiday travels boosted air traffic. Except for kerosene and naphtha, the consumption of all other petroleum products went up during the month.

Domestic output of oil and gas, however, did not pick up. In May, local crude oil production declined 3.3% to 3.1 million metric tonnes from a year ago. Natural gas production fell 6.9% to 2,656 million metric standard cubic meters. Increasing gas demand in the country was met by increased import of liquefied natural gas. India imported 2082 MMSCM of LNG, 43% more than it did a year ago.

The government has set a target to bring down oil imports to 67% of total consumption by 2022.

According to the Petroleum Planning & Analysis Cell's estimate, India's crude oil import will increase 2% to $66 billion in 2016-17 from $64 billion in the previous financial year considering crude oil price of $45 per barrel for the Indian basket and an exchange rate of Rs 67 to a dollar for the remaining part of this fiscal.

The prices of Brent crude averaged $46.88 per barrel in May, compared to $41.48 in April. The Indian basket crude oil averaged $44.97 per barrel in May, significantly higher than $39.85 a barrel in the previous month.

Source:economictimes.indiatimes.com