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
Pakistan Stock Exchange may gain at least 27% by end of 2025 — Bloomberg
- Benchmark KSE-100 Index forecast to increase to 127,000 points by Dec. 2025, a 34% rise, from 94,704 points it closed on Friday
- Key index advanced as much as 0.6% on Monday, taking gains to more than 50% this year, the second best performer globally
ISLAMABAD: Pakistan’s stocks are expected to advance by more than a quarter by the end of next year as the nation’s economy shows improvement under a loan program with the International Monetary Fund and the currency stabilizes, Bloomberg reported on Monday, quoting two brokerage houses.
The benchmark KSE-100 Index is forecast to increase to 127,000 points by December 2025, or a 34% rise, from the 94,704 points it closed last Friday, according to Topline Securities Ltd. in a report announced on Nov. 16. Arif Habib Ltd. targets the index to reach 120,000 points, a gain of 27%.
“The stage is set for a potential market re-rating with declining interest rates, a stable rupee, and improving macroeconomic indicators,” Karachi-based brokerage Arif Habib commented in a report.
Pakistan’s economy has stabilized with inflation easing from record levels that has allowed the central bank to cut the interest rate for four straight meetings to 15 percent, the lowest in two years.
The key index advanced as much as 0.6% on Monday, taking its gains to more than 50% this year, the second best performer globally, according to data compiled by Bloomberg.
The equity market will be offering a 37% return including 10% dividend yield by the end of 2025 because of economic stability and falling bond yields, Karachi-based Topline said in a separate report.
Pakistan is also increasingly attracting the attention of foreign investors, particularly in its debt and equity markets, said Arif Habib.
Saudi commercial records surge 68% in 20 months
RIYADH: Saudi Arabia has seen a remarkable 68 percent growth in commercial records over the 20 months since the implementation of its New Companies Law, according to a recent government report.
The law, which took effect on Jan. 19, 2023, introduced significant reforms aimed at simplifying business processes and fostering a more dynamic corporate environment. By the end of the third quarter of 2024, the number of commercial records had risen to 389,413, up from 230,762 before the law’s introduction, the Ministry of Commerce reported.
Among the law’s key innovations are streamlined processes for setting up joint-stock companies, the ability for shareholders to participate remotely, and improved financing options, including allowing limited liability companies to issue debt instruments. These changes have reshaped the corporate landscape by simplifying company formation and offering flexible financing avenues.
The law also encourages broader ownership by easing the purchase of shares and equity stakes. Notably, it introduces a simplified joint-stock company model and includes provisions for non-profit organizations. Other reforms include allowing sole proprietorships to transition into any company type, modernizing rules for corporate mergers and transformations, and permitting company splits.
Small and micro enterprises are exempt from the requirement of an external auditor, reducing their compliance burdens. Additionally, the law enhances digital services, enabling remote shareholder meetings and decision-making, and removes restrictions across all stages of company formation, operation, and exit.
The reforms also introduce a family charter to govern family-owned businesses and simplify the process for foreign companies to operate in the Kingdom, creating a more flexible and investor-friendly environment.
In its September report, the International Monetary Fund praised the reforms for improving access to financing, reducing fees, and strengthening governance, which has helped attract record levels of foreign investment. The IMF also noted that the reforms have contributed to the growth of non-oil sectors and increased employment.
The IMF further highlighted that the rise in non-oil revenues underscores the effectiveness of these reforms, which have also led to better compliance and alignment of customs procedures with international best practices.
In addition, in September, Saudi Arabia approved new laws related to commercial registration and trade names, further streamlining business operations and improving the overall business environment.
These changes were approved at a Cabinet session in Riyadh on Sept. 17, chaired by Crown Prince Mohammed bin Salman.
Saudi Arabia’s refined crude exports hit 23-month high at 1.54m bpd
RIYADH: Saudi Arabia’s refinery crude exports surged 23 percent in September compared to the previous month, to reach 1.54 million barrels per day – the highest level for almost two years.
According to figures from the Joint Organizations Data Initiative, the increase to a 23-month high was fueled by strong demand for refined products, including diesel, motor gasoline, aviation gasoline, and fuel oil.
Diesel led the export mix, accounting for 47 percent of shipments, with volumes rising 35 percent month on month to 727,000 bpd. Motor and aviation gasoline made up 23 percent of exports, while fuel oil contributed 7 percent.
Refinery output in Saudi Arabia remained steady at 2.76 million bpd, with diesel representing 44 percent of refined products, followed by motor and aviation gasoline at 25 percent, and fuel oil at 17 percent.
Crude oil exports rose modestly by 1.41 percent to 5.75 million bpd, while production edged down by 0.19 percent to 8.97 million bpd.
Despite the rise in exports, domestic petroleum demand dropped sharply by 267,000 bpd to 2.62 million bpd, possibly due to seasonal factors and improved efficiency.
OPEC announced in November that eight key OPEC+ nations, including Saudi Arabia, Russia, and Iraq, have agreed to extend voluntary production cuts of 2.2 million bpd through December.
Initially introduced in 2023 to stabilize the oil market, the cuts reflect the group’s commitment to the Declaration of Cooperation, with plans to offset overproduction by September 2025. Iraq, along with Russia and Kazakhstan, reaffirmed adherence to the agreement and compensation schedules earlier this month.
Direct crude usage
Saudi Arabia’s direct crude oil burn dropped significantly in September, falling by 296,000 bpd compared to August to 518,000 bpd — a 36.4 percent decline and the lowest level in five months.
This decline is largely attributed to seasonal temperature changes, as the weather begins to cool from the peak summer heat, reducing the demand for air conditioning and, consequently, the need for crude oil in power generation.
Compared to September last year, the lower burn levels also reflect the Kingdom’s ongoing efforts to enhance energy efficiency and diversify its power sources.
By expanding its natural gas network and scaling up renewable energy projects, the Kingdom is reducing its reliance on crude oil for electricity generation, aligning with its Vision 2030 strategy for a sustainable and diversified energy mix.
More than 70 Saudi firms travel to Poland, Slovakia to boost trade ties
JEDDAH: Representatives from 72 Saudi firms are part of a group visiting Poland and Slovakia in a bid to increase trade with the European countries.
Delegates from Federation of Saudi Chambers are also part of the trip, which will see high-level economic meetings involving senior government officials and private sector representatives. Their objective is to explore investment opportunities and sign several agreements and commercial partnerships.
The delegation, led by Chairman of the Federation of Saudi Chambers Hassan bin Mujib Al-Huwaizi, includes over 72 business representatives from various economic sectors, along with governmental entities and authorities, according to the Saudi Press Agency.
In August, the Kingdom and Poland established a joint business council for the 2024-2028 term to boost trade and investment between the two countries. The move is part of the nation’s broader strategy to deepen economic ties with Europe, with a particular focus on Poland, one of the continent’s largest economies.
Poland has seen impressive growth in its agri-food sector, with exports reaching a record €47.9 billion ($51.1 billion) in 2023 — a €10 billion increase from the previous year.
In 2023, Saudi Arabia’s trade exchange with Poland reached SR33.7 billion. The Kingdom’s primary exports to Poland include mineral products and plastics, while Poland’s main exports to the Arab country consist of tobacco, machinery, and mechanical appliances.
The relationship between Saudi Arabia and Slovakia has also witnessed growth following the official opening of the Slovak Embassy in Riyadh in recent years. Additionally, bilateral trade has increased significantly, highlighting untapped investment opportunities.
The delegation will begin its visit to Poland by holding the Saudi-Polish Business Council meeting, a joint forum, and bilateral meetings between representatives.
In Slovakia, the delegation will host the Saudi-Slovak Business Forum, conduct meetings between companies from both sides and sign an agreement to establish a joint business council.
Through its recent series of international visits to ten countries, the federation is leading efforts to open new markets and opportunities for the Kingdom’s backers and to boost trade and investment exchanges with countries worldwide, in alignment with the aspirations of Saudi Vision 2030.
Blatco, Golden Star Rubber to build Middle East’s largest tire plant in Saudi Arabia
JEDDAH: Saudi Arabia’s Black Arrow Tire Co., or Blatco, has partnered with Thailand’s Golden Star Rubber Co. to build the Middle East’s largest tire manufacturing facility in Yanbu, with a $470 million investment.
The plant will initially produce 4 million tires annually for passenger vehicles, with plans to expand production to 6 million tires per year, including truck and bus tires.
The Yanbu facility is set to boost Saudi Arabia’s industrial capabilities and will create more than 2,000 local jobs. The partnership will supply the facility with the natural rubber required for tire production in the Kingdom.
The Saudi tire market, which produced 22.6 million units in 2023, is projected to grow at a compound annual growth rate of 1.26 percent, reaching 25.5 million units by 2032, according to market research firm IMARC Group.
Largely import-driven, the sector is dominated by Chinese tire brands due to their affordability and availability. However, flagship brands have gained traction in recent years, thanks to their higher quality and longer product lifecycles, the report added.
The ceremony to mark the deal, signed by Blatco Chairman Abdullah Al-Wahibi and Golden Star Rubber Chairman Amir Zafar, was also attended by Hassan Al-Huwaizi, president of the Federation of Saudi Chambers of Commerce, Al-Ekhbariya reported.
The agreement aligns with Vision 2030’s goals to localize industries, transfer knowledge, and support domestic content. The partnership is also supported by the Saudi-Thai Business Council, aimed at strengthening commercial and investment ties between Saudi Arabia and Thailand.
The plant will be situated in the Kingdom’s industrial city on the Red Sea, under the Royal Commission for Jubail and Yanbu. Blatco officials anticipate that 50 percent of production will be consumed locally, with the remainder to be exported to regional markets.
Earlier this year, Blatco signed a 20-year technology export agreement with South Korea’s Kumho Tire. As part of the deal, Kumho Tire agreed to supply Blatco with the technology to produce passenger car tires for the Middle East, including Saudi Arabia.
Founded in Riyadh in 2019, Blatco aims to become a key player in automotive manufacturing and distribution in the region. The company focuses on contributing to Saudi Arabia’s economy, creating jobs, and supporting technology transfer initiatives, according to its website.
In October 2023, the Kingdom’s Public Investment Fund announced a separate $550 million tire factory in a joint venture with Italy’s Pirelli.
PIF holds a 75 percent stake in the venture, with Pirelli providing technology and commercial support. The facility, set to begin operations in 2026, will produce tires for passenger vehicles under the Pirelli brand and a new local brand for domestic and regional markets.
