May petrol sales in fast lane as summer travel peaks, diesel & ATF go off the boil, LPG on fire
Preliminary sales figures from state-owned fuel retailers, made available on May 16, showed that petrol usage surged by approximately 10 per cent in the first half of May as travel during the summer season caused a spike in demand. Between May 1 and May 15, petrol consumption escalated to 1.5 million tonnes, up from 1.37 million tonnes during the same timeframe last year, news agency PTI reported. This marks a 10.5 per cent increase over the 1.36 million tonnes consumed during the first half of May 2023 and is nearly 46 per cent higher than the consumption levels observed in the affected first two weeks of May 2021. Meanwhile, diesel sales experienced a modest growth of 2 per cent, reaching 3.36 million tonnes, as reported by the three major state-owned fuel retailers that control around 90 per cent of the market. Diesel’s demand has shown signs of recovery following a rebound since last month. Diesel, essential for transportation and the rural agricultural economy, recorded only a 2 per cent increase in demand during the fiscal year that concluded on March 31, 2025. In April, diesel consumption climbed to 8.23 million tonnes, representing nearly a 4 per cent rise from the previous year’s figures. For the period of May 1-15, diesel sales were 2 per cent higher compared to the 3.29 million tonnes consumed during the same period last year. Additionally, this represents a 1.3 per cent increase over the first half of May 2023, and a significant 16 per cent rise from the Covid-affected first fortnight of May 2021. Diesel sales also increased by 5.2 per cent when compared to the 3.19 million tonnes consumed in the first half of April 2025. As summer sets in, there is typically an uptick in rural demand for irrigation and air conditioning in urban areas. Industry experts noted that diesel had been experiencing a slowdown in recent months, prompting discussions about its future trajectory. The growth seen since April has been attributed to a rise in consumption for election campaigning that took place the previous year. In terms of aviation fuel, the growth in jet fuel (ATF) consumption slowed to 1.1 per cent, totaling 327,900 tonnes during the May 1-15 period. This deceleration can be traced back to flight restrictions imposed in certain regions of northern and western India due to ongoing tensions with Pakistan, which negatively impacted demand. However, ATF sales were still 8.6 per cent higher compared to the same period in May 2023 and 11 per cent more than the first half of May 2021. In comparison to the previous month, jet fuel consumption saw a decrease of 5.8 per cent from the 348,100 tonnes recorded during April 1-15. LPG (liquefied petroleum gas) consumption continued its robust growth, increasing by 10.4 per cent to reach 1.34 million tonnes in the first fortnight of May, largely fueled by Ujjwala connections. Since 2019, domestic cooking gas consumption has effectively increased by volumes equivalent to nearly five months. Cooking gas sales during this period were 10 percent higher than the 1.22 million tonnes consumed during May 1-15, 2023, and 33 per cent greater than the 1.01 million tonnes recorded in the first half of May 2021. Additionally, LPG sales rose by 7.3 per cent compared to the 1.25 million tonnes consumed in the first half of April.
Kuwait to Invest $50 Billion to Boost Oil Production Capacity
Kuwait, one of the top OPEC producers in the Middle East, plans to invest as much as $50 billion to raise its oil production capacity to above 3 million barrels per day (bpd) over the next five years, Kuwait Petroleum Corporation’s deputy chairman and CEO, Shaikh Nawaf Al-Sabah, has said. Kuwait is “planning to invest $9 to $10 billion annually in the next five years” to increase oil production capacity, Arabian Gulf Business Insight (AGBI) quoted Al-Sabah as saying. Kuwait’s crude oil production averaged 2.415 million bpd in April, according to secondary sources in OPEC’s latest Monthly Oil Market Report (MOMR) published earlier this week. Kuwait, a founding member of OPEC, is the cartel’s fifth-largest producer, behind Saudi Arabia, Iraq, Iran, and the United Arab Emirates (UAE). The $50 billion investment by the end of the decade is part of a longer-term plan for Kuwait to boost its oil production capacity to almost 4 million bpd by 2040, Al-Sabah said. The 2040 strategy of Kuwait’s state-owned corporation envisages the OPEC producer to boost its sustainable crude oil production capacity to 4 million bpd, including capacity in the so-called Partitioned Neutral Zone (PNZ), established between Saudi Arabia and Kuwait in 1922 to settle a territorial dispute. The strategy also targets Kuwait to achieve sustainable non-associated gas production in Kuwait, including the Neutral Zone, of up to 2.0 BSCFD by 2040. Last year, Kuwait announced the discovery of a significant amount of oil and gas in the Al-Noukhitha offshore field, estimated at around 3.2 billion barrels of oil equivalent. The discovery includes 2.1 billion barrels of light oil and 5.1 trillion standard cubic feet of natural gas. Earlier this year, Kuwait approved a financing and liquidity law that will allow it to return to the debt market after eight years, with borrowing expected to fund projects to diversify its dependence on oil revenues. While the other OPEC Gulf heavyweights, Saudi Arabia and UAE, are investing – and borrowing to invest – in major infrastructure, AI, and technology projects, Kuwait has been lagging behind. Over the past few years, Kuwait has been more vulnerable to oil price slumps than its fellow Gulf producers as it hasn’t been able to borrow since 2017.
Oil Set For Weekly Gain on China Trade Deal Hope
Crude oil prices were set for a weekly gain after a string of losses on the news of a trade war ceasefire between the U.S. and China, which sparked hopes the two would come to a mutually beneficial understanding that would end the tariff spat. At the time of writing, Brent crude was trading at $64.64 per barrel and West Texas Intermediate was changing hands for $61.72 per barrel, both up, albeit moderately, from the start of the week. According to Reuters, the weekly gain will be about 1%. The modesty of the weekly gain is likely related to a couple of solid bearish new developments on the geopolitical and the forecasting fronts. On the geopolitical front, reports emerged suggesting the U.S. and Iran were closer to a new nuclear deal than they had been for months. On the forecasting front, the International Energy Agency once again injected pessimism into oil markets predicting slower than previously expected oil demand growth—despite the anticipated end to the U.S.-Chinese trade war. Economic headwinds and record electric vehicle sales are set to materially slow down global oil demand growth for the rest of the year, the IEA said on Thursday. World oil demand rose by 990,000 barrels per day in the first quarter of 2025. But the remainder of the year will see demand growth at just 650,000 bpd, the agency said in its closely-watched monthly Oil Market Report for May. The IEA has over the past few years built a reputation for pessimistic forecasts when it comes to oil demand—only to revise them when data from the physical market points in a different direction. In this case, we’ve seen a rebound in Chinese oil imports at the start of the second quarter of the year and a surge in Indian oil imports, which lifted them to an all-time high in March. In related recent news, Japanese refiners were scaling back their transition plans to refocus on oil.
Petronet LNG requests extra land for Dahej petrochemicals complex project
Petronet LNG Ltd, India’s largest gas importer, has requested additional land from the Gujarat government for a fabrication yard as part of its upcoming petrochemical project in Dahej. The company is investing ₹206.85 billion in the plant, construction of which is already underway. The project aims to meet the rising domestic demand for petrochemical products and enhance the company’s self-reliance in production. The plant will use imported ethane to produce key chemical components used in products such as plastics, detergents, and cosmetics. In addition, an estimated ₹50 billion in supplementary investment is planned in the vicinity of the plant. Fabrication yards are crucial for assembling infrastructure components for large industrial projects. The Prime Minister had laid the foundation stone for the petrochemicals complex of Petronet LNG, including ethane and propane handling facilities, in March last year. A senior state official stated that the project will convert propane into propylene through a Propane Dehydrogenation (PDH) unit, which will then be polymerized to produce polypropylene in a dedicated PP unit—supporting the goal of import substitution.
GAIL Plans 5-6 MTPA LNG Expansion by 2030
GAIL has announced ambitious plans to expand its LNG (Liquefied Natural Gas) capacity by 5-6 MTPA under term deals by 2030. The company is also targeting the addition of around 255 new CNG stations over the next two years, signaling aggressive growth in the natural gas segment. The company is optimistic about the possibility of natural gas being brought under the GST regime soon, which could further support growth. Key Highlights of GAIL’s Expansion Plans: LNG Expansion: Targeting 5-6 MTPA more LNG by 2030. CNG Station Growth: Aiming for 255 new CNG stations in the next two years. Transmission Volume: Currently at 120-127 MSCMD, targeting 138-139 MSCMD in FY26. Natural Gas Under GST: GAIL expects positive regulatory changes soon.