By RAKESH SHARMA
NEW DELHI -- Indias oil product demand will
slow in the second half of the year due to increased global
economic turmoil, though it will rebound in 2013 thanks to 7%
projected economic growth, the
International Energy Agency said Friday.
The EIA's monthly forecast is broadly in line with domestic
projections. Summer energy demand
recently peaked, and it will likely fall off over the next few
months, barring unforeseen contingencies.
The government has announced plans for $1 trillion in
infrastructure investments over the next five years as it
builds roads, railways, airports and power plants.
Indias oil ministry has forecast demand for oil
products in the financial year that began April 1 to rise 6.1%
to 157.07 million metric tons, the fastest pace in the past
four years, helped by government spending on the country's
woefully inadequate infrastructure.
India has an installed refining capacity of 4.26 million
bpd and is a net exporter of oil products, relying on imports
to meet about four-fifth of its crude-oil needs.
In its monthly report, the IEA said Indias demand for
oil products was at 3.8 million bpd in June up 7.2% compared
with a year earlier, a sharp acceleration compared with average
growth of less than 3% in the previous six months.
Diesel consumption jumped by 14% on year in June, at 1.5
million bpd, as farmers increased their reliance on water pumps
to irrigate their crops due to reduced monsoon rainfall and
city dwellers used increased power to operate air conditioning
to beat the summer heat.
Coal and natural
gas shortages have hurt power generation in the country,
leading to frequent blackouts and forcing household and
industrial consumers to rely on diesel-powered generators.
The IEA said July's electricity blackouts - especially the
collapse of three grids that affected hundreds of millions in
northern India - will likely provide further
short-term support for diesel demand as a major stop-gap power
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