Slump in car sales depresses Indian oil demand

Crude oil processed in India fell 4.5% on year to 4.43 million barrels per day in January, according to the Ministry of Petroleum and Natural Gas. It was the fifth consecutive month of year-on-year decrease.

However, Indian electricity supply in the same month rose 5.7% from a year ago, recorded seventh months consecutive increase. Entire energy demand in the country seems not shrink.

The cause of the slowing down of petroleum demand in India is estimated to be the slump in automobile sales.

Indian passenger car sales in 2013 fell 9.6% on year to 1.81 million units due to rising fuel prices and high interest rates. It was the first annual sales decrease since 2002.

Passenger car sales in January also slipped by 7.6% from a year ago to 160,289 units, according to the Society of Indian Automobile Manufacturers. Consumers in the nation are very reluctant to buy cars.

The sluggish petroleum demand in India, however, is unlikely to depress the global crude oil market, since estimated main part of the near term growth of world petroleum demand has already shifted from the emerging market to advanced nations.