India's fuel demand rose to a three-year high in March as the market accumulated supplies foreseeing price spikes while easing COVID-related curbs boosted demand.
With demand increasing, refiners are prompted to boost runs to meet demand, said Ehsan Ul Haq, an analyst from Refinitiv.
However, crude production fell over 3% to about 598,000 bpd (2.53 million tonnes), the data showed.
This was largely due to output from Oil and Natural Gas Corporation being 12.6% lower for the month and 1.84% lower versus March 2021 due to a delay in mobilization of the Mobile Offshore Production Unit (MOPU) Sagar Samrat, located in the Mumbai High Field, the release stated.
Annual oil imports in March marginally rose to 4.4 million bpd from last year, tanker tracking data from industry sources showed.
"Indian refiners are profiting from cheap Russian crude, which has been selling at a discount of around $35 per barrel to Brent," Ul-Haq added, which leads to better refinery margins for refiners.
Fitch Ratings also added that Indian gasoline and gas oil prices could track crude oil over the long term.[O/R]
Natural gas output rose 7.5% year-on-year to 2.89 billion cubic metres, the release said.
(Reporting by Seher Dareen and Roshan Abraham in Bengaluru; Editing by David Goodman and Marguerita Choy)
By Seher Dareen and Roshan Abraham
