Strong recovery in oil and gas volumes likely in FY22: ICRA

Mumbai, Jan 9 : The domestic demand for petroleum products is expected to increase at a healthy rate of 8 to 10 per cent in FY22 on a year-on-year basis, ratings agency ICRA said in a report.
Accordingly, the report said a growth in economy and pick-up in industrial activity.
The report explained that growth in Motor Spirit (MS) consumption is expected due to preference for personal mobility while higher off-take of High Speed Diesel (HSD) and industrial fuel would likely be driven by a pick-up in economic activity.
As per the report, Aviation Turbine Fuel (ATF) demand is expected to lag due to the discretionary nature and the perceived risk of air travel.
According to Prashant Vasisht, Vice President and Co-Head, Corporate Ratings, ICRA, “Though, refinery capacity utilisation levels are recovering and were 89 per cent in October 2020, refining margins remained weak due to the global supply overhang.” “Going forward in FY2022, the refinery margins are expected to remain low owing to significantly lower ATF demand vis-a-vis pre-Covid levels. Even though, there have been announcements of the closure of a number of refineries in CY2020 in the US, Europe and Asia, weak refinery economics are expected to be protracted.”