In India, oil demand in September 2013 increased for the first time since May 2013. It was up by 1.6% y-o-y, driven by rising requirements of feedstock for electricity and cement production. This development came despite continuing concerns in relation to the depreciation of the rupee and pending fiscal issues. Strong demand in LPG for the petrochemical industry, as well as requirements for bitumen and petroleum coke for the cement and road construction industries, were partly offset by a slight decline in kerosene and gas/diesel oil requirements, as well as sharply dropping residual fuel demand, the latter resulting from fuel substitution with natural gas in the agricultural sector. September was the month in 2013 with the lowest y-o-y growth in gasoline, which was also negatively influenced by the great number of national holidays.
The picture in the Indian automobile industry seems to have stabilized, with expectations for promising sales during October 2013. Nevertheless, projections foresee the year to end with negative growth in car sales for the first time since 2003, keeping at least the short-term outlook risks for the Indian automobile market on the downside, in line with the weak state of the economy. Overall forecasts for 2013 and 2014 Indian oil demand have remained unchanged since the projections of the previous month and after some revisions two months ago as a result of the country’s growing fiscal deficit, which may imply shrinking demand for all oil product categories in the near future, should it remain unsolved.
In Indonesia, the country’s growing fiscal deficit and higher fuel prices curbed oil demand in August to almost the same levels as last year. Moreover, Indonesia has recently introduced policies to reduce fuel consumption – the most prominent being the introduction of tax incentives for fuel efficient vehicles and vehicles with smaller engines. Indonesia is also planning the improvement of its Radio Frequency Identification (RFID) technology. RFID provides a technology that enables the scanning of vehicles, which could purchase subsidized fuels, leading to a better control of subsidies.
August 2013 saw negative oil demand growth in Thailand y-o-y, as a result of lower LPG and distillates requirements. Higher LPG prices, as a result of lower subsidies, have negatively influenced LPG demand in households. As in July 2013, Taiwan’s flourishing petrochemical industry, in combination with strong transportation fuel requirements, pushed the country’s oil demand up by almost 15% in August y-o-y. Other Asia’s oil demand is expected to grow strongly by 0.20 mb/d in 2013. In 2014, oil demand is forecast to grow solidly again, increasing by 0.24 mb/d.