LONDON: India’s gasoline consumption is surging and has become one of the fastest-growing components of global oil demand.
With other parts of the global economy struggling, continued growth in gasoline consumption in India, together with the US and China, has become one of the most important indicators for global oil prices.
Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries are relying on India’s continued consumption growth to help absorb excess crude supply and rebalance the oil market in 2016/17.
India’s drivers used 500,000 barrels per day of motor spirit in the 12 months ending in February 2016, according to the Petroleum Planning and Analysis Cell of the Ministry of Petroleum.
Gasoline consumption rose by more than 60,000 bpd in 2015 compared with an increase of 240,000 bpd in the (much larger) US market.
Gasoline still accounts for a relatively small share, about 12 percent, of refined petroleum products consumed in India. The corresponding figure for the United States is 47 percent.
But gasoline consumption has been growing much faster than petroleum demand as a whole as the country becomes more affluent and the expanding urban middle class become car owners.
Gasoline consumption has grown at a compound annual rate of 11 percent over the last five years compared with 5 percent for other products.
Gasoline consumption growth surged to around 14 percent over the last year compared with 9 percent for other products.
Gasoline consumption has doubled since the start of 2009 and quadrupled since 1999, according to India’s Central Statistics Office.
India’s growing number of drivers provided the third-largest increase in gasoline consumption anywhere in the world last year after the US and China.
The Ministry of Petroleum predicts gasoline consumption will increase further to almost 800,000 bpd by 2021/2022.
Since actual consumption is already running ahead of the five-year plan the eventual outturn could be higher.
Sales of passenger cars and utility vehicles are expected to grow by as much as 12 percent in 2016/17 up from 6 percent in 2015/16, which translates to around 230,000 new vehicles hitting the roads every month.
The government plans to spend around $14 billion in the next fiscal year upgrading the country’s road network.
Consumption of other fuels and lubricants is also growing, although not as fast as the super-charged gasoline market.
India’s total petroleum consumption has increased by around 340,000 bpd over the last year, with gasoline accounting for more than 18 percent of the increase.
India’s fuel markets have become one of the most important sources of global oil demand growth.
India accounted for more than one barrel in every six of extra oil demand reported in 2015, according to estimates prepared by the International Energy Agency.
Total consumption of petroleum products has doubled from 2 million bpd in 1998/99 to almost 4 million bpd in 2015/16.
India’s oil ministry predicts consumption will hit 5.4 million bpd by 2021/22.
— John Kemp is a Reuters market analyst. The views expressed are his own.
India’s thirst for gasoline helps spur global oil demand
India’s thirst for gasoline helps spur global oil demand
Over 3k flights cancelled across the Middle East after attack on Iran by the US, Israel
RIYADH: US and Israeli strikes on Iran led to widespread airspace shutdowns in the Middle East, canceling and rerouting thousands of flights and paralyzing key international travel corridors.
Flight cancellations affected seven airports across the Middle East, including Dubai and Abu Dhabi in the UAE, Doha in Qatar, and Manama in Bahrain.
Emirates Airlines said in a statement: “Due to multiple regional airspace closures, Emirates has temporarily suspended all operations to and from Dubai, up until 1500 hrs UAE time on Monday, 2 March.”
A flydubai spokesperson said the situation is evolving, and the airline is closely monitoring developments while coordinating with authorities to adjust its flight schedule.
“Our teams are working diligently to implement comprehensive welfare for all affected customers. The safety of our passengers and crew remains our highest priority,” the spokesperson said.
He added: “We are currently experiencing a high volume of calls and appreciate our customers’ patience while our teams work to assist everyone as quickly as possible.”
Qatar Airways announced that the airport will remain closed until at least the morning of March 2.
“Qatar Airways flights to, and from, Doha have been temporarily suspended due to the closure of Qatari airspace,” the airline said.
It added: “Qatar Airways will resume operations once the Qatar Civil Aviation Authority announces the safe reopening of Qatari airspace.”
Saudia also said in an official statement that it had canceled a number of flights due to developments in the region and the closure of airspace.
The organization said the decision was taken in line with aviation safety and security standards, noting that its Emergency Coordination Center is closely monitoring developments with relevant authorities.
Saudia urged passengers to verify the status of their flights before heading to the airport and said guests would be notified of updates through the contact details associated with their bookings.
The carrier added that further information would be announced in a subsequent statement if available.
Air Arabia also said its flights were experiencing cancellations, delays, or rerouting as a result of the evolving situation and airspace closures.
Airlines cited airspace closures and safety concerns as the main reasons for flight disruptions, urging passengers to check official channels for updates as the situation develops.
Israeli airspace also remained closed on March 1st. Israeli airline El Al said it was preparing a recovery effort to bring home Israelis stranded abroad once the airspace reopened.
Travelers were either stranded or diverted to other airports on Feb. 28 after Israel, Qatar, Syria, and Iran as well as Iraq, Kuwait and Bahrain, closed their airspace.
After the UAE announced a temporary partial airspace closure, FlightRadar24 recorded no flights over the country.
The closures affected key hub airports in Dubai, Abu Dhabi, and Doha. Emirates, Qatar Airways, and Etihad, airlines that operate from these hubs, normally handle around 90,000 passengers daily, with even more traveling to other Middle Eastern destinations, according to aviation analytics firm Cirium.
Airports hit by attacks
Two airports in the UAE reported incidents as the government there condemned what it called a “blatant attack involving Iranian ballistic missiles” on Feb.28.
Dubai International Airport, the UAE’s largest and one of the world’s busiest, reported four injuries, while Abu Dhabi’s Zayed International Airport said a drone attack killed one person and injured seven others. Strikes were also reported at Kuwait International Airport.
Though Iran did not publicly claim responsibility, the scope of retaliatory strikes that Gulf nations attributed to Iran extended beyond the US bases that it previously said it would target.
Flight delays, cancellations are likely to continue
“For travelers, there’s no way to sugarcoat this,” said Henry Harteveldt, an airline industry analyst and president of Atmosphere Research Group.
“You should prepare for delays or cancellations for the next few days as these attacks evolve and hopefully end,” he added.
To avoid conflict zones, airlines are rerouting Middle East flights over Saudi Arabia, adding hours and fuel costs, which could push ticket prices higher if the tensions persist.
The extra flights will strain air traffic controllers in the Kingdom, who may need to slow traffic for safety. Meanwhile, countries that closed their airspace will lose out on overflight fees from passing airlines.
Mike McCormick, former head of air traffic control at the FAA and now a professor at Embry-Riddle Aeronautical University, said some countries may reopen parts of their airspace in the coming days once US and Israeli officials provide airlines with details on military flight zones and Iran’s missile capabilities.
“Those countries then will be able to go through and say, ok, we can reopen this portion of our space but we’ll keep this portion of our airspace closed,” McCormick said.
“So, I think what we’ll see in the next 24 to 36 hours is how the use of airspace evolves as the kinetic activity gets more well-defined and as the capability of Iran to actually shoot missiles and create additional risk is diminished due to the attacks,” he added.
But it is unclear how long the disruption to flight operations could last. For comparison, the Israeli and US attack on Iran in June 2025 lasted 12 days.
