Global energy markets that have thrown up plenty of anomalies in 2022 as flows get rerouted and prices jump just saw a fresh quirk: India, typically Asia’s leading gasoline and diesel exporter, has been forced to step up imports of the fuels.
Gasoline imports rose to about 13,000 barrels a day in the first half of June, a seven-month high, according to Vortexa Ltd. Diesel imports, meanwhile, are set to surge to the highest since February 2020 at about 48,000 barrels a day, tenders by Indian Oil Corp. and Bharat Petroleum Corp., as well as Vortexa figures show.
The rare uptick has been driven by a need to cover local shortfalls even as India has emerged as a top buyer of shunned Russian crude following the invasion of Ukraine, and its refiners go all out to produce fuels. Elevated international product prices have prompted India’s private refiners to boost exports, creating a shortage that state processors are now rushing to address with extra imports.
The heightened import activity from India is shrinking Asia’s pool of fuel supplies at a time when China, which is also a key shipper of diesel and gasoline, has been cutting back. Planned fuel volumes from China for July have been reduced following refinery maintenance this month, according to industry consultant OilChem.
India’s rush to buy gasoline and diesel has already driven a surge in regional refining margins for both fuels, according to industry consultancy FGE, which said there have been fuel shortages in the states of Tamil Nadu and Gujarat. The country is expected to keep importing more fuel in the coming months, FGE said in a recent note.