Demonetisation to hold back India’s 2017 fuel demand growth

Fuel demand growth is expected to slow by as much as 40 per cent in 2017 from last year as a government-induced cash shortage hurts businesses, industry and car sales.

The dent in demand growth in the world’s third-largest oil consumer is expected to be temporary, though, with India still taking up the third-biggest portion – behind China and United States – of 2017’s rise in fuel use on a barrel-per-day basis, according to energy consultancy Wood Mackenzie.

Fuel demand in 2016 grew at its fastest in at least 16 years as low oil prices boosted demand for gasoline and aviation fuels, but analysts say the nation’s currency troubles will put the brakes on this year.

Oil product demand growth in 2017 is expected to drop to 160,000 barrels per day (bpd), from 270,000 bpd in 2016, according to Woodmac. Read More…