MOSL: OIL & GAS-Auto fuel consumption remains strong; Positive on OMCs, with preference for IOC

​OIL & GAS: Auto fuel consumption remains strong; Positive on OMCs, with preference for IOC

Latest petroleum data suggest strong growth of 9.8% and 6.2% in petrol (MS) and diesel (HSD) consumption, respectively, in YTD FY18. During the same period, consumption of LPG grew by 10% and of kerosene (SKO) declined by 35.6%. Strong auto fuel consumption is positive for the OMCs (IOC, BPCL and HPCL). We maintain our optimistic stance on the OMCs, with a relatively high preference for IOC.

Strong consumption growth of 9.8% in MS and 6.2% in HSD

• ​Total petroleum products consumption in India grew by 9.9% YoY (+3.2% MoM) to 16.3mmt in September 2017. For YTD FY18, consumption is up 1.5% YoY to 98.3mmt.
  
• Consumption in September was driven by strong growth in HSD (+17.8% YoY to 2.1mmt) and MS (+16.6% YoY to 6.1mmt) consumption. YTD FY18 growth for MS and HSD stands at 9.8% YoY and 6.2% YoY, respectively.
  
• While LPG consumption grew 4.1% YoY to 1.9mmt, SKO consumption declined 33.6% YoY to 333kmt in September. YTD FY18 consumption growth for LPG and SKO stands at 10% YoY and -35.6% YoY, respectively.
  
• Naphtha consumption grew 4.9% YoY to 1.2mmt in September; it is down 13% YoY in YTD FY18.
  
• Consumption of lubricants & grease grew 34% YoY to 296kmt, while that of FO & LSHS declined 14% YoY. In YTD FY18, consumption of lubricant & grease and FO & LSHS is down 2.5% YoY and 8.7% YoY, respectively.