July crude oil import up 9% as production dips

India imported about 9 per cent more crude oil this July compared with the same month last year, as domestic oil production from ageing fields dipped.

However, the import of petroleum products declined about 22 per cent owing to addition in refining capacity by the Asia’s third largest consumer of oil.

The increase in domestic refining capacity by 7 per cent was contributed mainly from Essar Oil commissioning its 10.5 million tonne per annum (mtpa) Vadinar refinery in December, and thereafter increasing it further by another 25 per cent.

A surprise element in the monthly data released by the petroleum ministry was the fall in diesel import by 92 per cent in July 2008. Two reasons are being cited for the this. First, oil marketing companies were able to source diesel from Essar and thereby did not depend on import. Second, the growth in demand for diesel in July was only 10 per cent, much lower than earlier months. This, according to oil companies, was due to better hydel power generation due to good rainfall in the month.

The country consumed 10.3 per cent more diesel in July at 4.08 million tonne, while petrol demand increased by 6.3 per cent to 0.91 million tonne.

However, Indian Oil Corporation (IOC) chairman and managing director Sarthak Behuria had said earlier this month that the diesel demand has increased by 18 per cent in the end of July compared with the demand in the beginning of April.

In July last year, IOC, the country’s largest refiner, had also shut down its refinery in Mathura for maintenance which brought down the country’s total output.
 

OIL IMPORTS (in million tonne)
	Jul-07	Jul-08	% change
Crude oil	10.9	11.85	8.7
Oil products	1.93	1.52	(-)21.6
Diesel	0.47	0.04	(-)91.6
OIL PRODUCT CONSUMPTION
Petrol	0.859	0.913	6.3
Diesel	3.697	4.076	10.3
Total	9.929	10.701	7.8

“The oil imports were easily 50 per cent more expensive as oil prices were at record highs,” said an official with IOC. The government did not disclose the value of the imports India imported 11.85 million tonnes of crude oil in July.

However, lower diesel import during the month pulled down overall imports of oil products by 21.6 per cent to 1.52 million tonne, according to government data, as the refineries produced more petroleum products during the month.