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India to surpass China as fastest growing petroleum market in 2018

With fuel consumption in India expected to grow at 6 percent in 2018, India will surpass China in terms of the fastest-growing petroleum product market in Asia. This information was revealed by Moody’s Investor Service and it was based on EIA data. As the economy in China slows down in 2018, its petroleum products market will grow around 2.5-3 percent. However, if we consider the net consumption by China, it would be 48 percent of Asia’s R&M sector’s demand growth in 2018. Nonetheless, India, with its expected 6 percent growth in petroleum consumption, it will surpass China in 2018 as the fastest growing petroleum products market in Asia. The report published by Moody’s also shows that there would be stability in the oil refining and marketing sector in Asia. Rated oil companies are expected to witness around 5 percent growth in their EBITDA in 2018.

Rachel Chua, a Moody’s Assistant Vice President and Analyst, said that China and India will be the two leading drivers of demand for petroleum products in Asia. As a result, refining margins would remain stable and will help oil companies improve their earnings. In Asia, the refining margins are expected to be around $6.2 per barrel. Chua said that an undersupply situation was created recently due to the closure of around one-fourth of US refining capacity. This led to increase in fuel prices. However, these are temporary fluctuations and would ease as the supply situation improves.

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