Indian oil consumption in the transportation (a boom in new car registration) and industrial sectors displayed solid growth during the year, but has been offset by fuel substitution to gas moves in the petrochemical and power plant industries. Furthermore, shortages in electricity supply gave a push to independent diesel-operated generators, which resulted in more diesel consumption. As a result of Indiaís oil demand, Other Asiaís oil demand grew by 230 tb/d for the year. The Indian auto market went into the negative at the end of the year as the government pulled out of its new car sales incentives. Energy-intensive projects in the Middle East, especially Saudi Arabia, led to a hike in the regionís oil demand by 2.6% in 2011. That accounts for almost 70% of the regionís oil demand growth. The non-OECD regionís oil demand assumed all the oil demand growth in 2011, totaling 1.2 mb/d y-o-y.
Indian diesel demand increased in October by 8%, due to the use of independent power generators for electricity. The electricity shortage countrywide reached 9.6% in October. According to the Indian Ministry of Petroleum, labour strikes at coal production sites led to the shortage of electricity. Another factor that led to the increase in diesel demand was the strong growth in new vehicle registrations, which exceeded 21%. Naphtha demand was up by 39% in October y-o-y, due to an increase in petrochemical activities and a low baseline for last year. Fuel oil demand was down by 17% in October as a result of fuel switching among power plants.
Indian oil demand growth is forecast to exceed 0.12 mb/d in 2011. Despite the forecast of lower Indian GDP next year, the countryís oil demand growth is expected to reach the same level as this year. According to the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales declined by 17.3% in October 2011 y-o-y, mainly due to high interest rates and increased petrol prices. Other Asian oil demand is expected to grow by 0.2 mb/d in 2012. Indian oil demand will contribute 62% to the regionís total growth.