Ind-Ra: Crude Oil and Liquefied Natural Gas Imports Increased in January 2018

India Ratings and Research (Ind-Ra) has published the February edition of its credit news digest on India's oil and gas sector. The report highlights the trends in the oil & gas sector with a focus on domestic production, import, consumption, refining and gross under-recovery, regulatory changes and the recent rating actions.

India's crude oil production decreased 3.2% y-o-y during January 2018. Production volume of Oil India Limited increased by 4.1%, while it declined by 4.1% and 3.5% for Oil & Natural gas Corporation and fields under production sharing contracts, respectively, during January 2018, on a y-o-y basis. The crude oil import volume increased by 15.3% y-o-y during January 2018. India's import dependency of crude oil had been around 82.7% during April - January 2018. Petroleum Planning and Analysis Cell estimates crude import of 219 million metric ton (mt) in FY18 (FY17: 214mt).

Refining throughput in January 2018 was 22.8mt, which was 7.9% y-o-y higher. Indian Oil Corporation Limited's (IND AAA/Stable) public sector refineries processed a higher volume, aiding the overall increase in throughput volume. India's petroleum products output was higher by 11.0% y-o-y to 22.9mt during January 2018. On a cumulative basis, the production was 4.5% y-o-y higher during April-January 2018.

Natural Gas production during January 2018 was 1.6% y-o-y lower. The production volume grew for Oil & Natural Gas Corporation (higher 2.2% y-o-y), whereas for Oil India Limited and 'from private/joint venture fields' it declined y-o-y (negative 4.2% and negative 13.3% y-o-y, respectively) during January 2018. NG consumption increased by 17.2% y-o-y during January 2018. The increase in consumption was largely on account of a 46.7% y-o-y increase in imports.

NG price has been raised by around 17% to USD2.89/mmbtu for October 2017-March 2018. Prior to this, the gas prices had been revised downward five times consecutively since the implementation of the domestic gas pricing formula in October 2014.

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