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Mumbai, Jan 10: India’s oil demand growth is set to overtake China by mid-2020s, priming the country for more refinery investment but making it more vulnerable to supply disruption in the Middle East, the International Energy Agency (IEA) said on Friday.

India’s oil demand is expected to reach 6 million barrels per day (bpd) by 2024 from 4.4 million bpd in 2017, but its domestic production is expected to rise only marginally, making the country more reliant on crude imports and more vulnerable to supply disruption in the Middle East, the agency said.

China’s demand growth is likely to be slightly lower than that of India by the mid-2020s, as per IEA’s China estimates given in November, but the gap would slowly become bigger thereafter.

“Indian economy is and will become even more exposed to risks of supply disruptions, geopolitical uncertainties and the volatility of oil prices,” the IEA said in a report on India’s energy policies.

Brent crude prices topped USD 70 a barrel on rising geopolitical tensions in the Middle East, putting pressure on emerging markets such as India. Like the rest of Asia, India is highly dependent on Middle East oil supplies with Iraq being its largest crude supplier.

India, which ranks No 3 in terms of global oil consumption after China and the United States, ships in over 80 per cent of its oil needs, of which 65 per cent is from the Middle East through the Strait of Hormuz, the IEA said.

The IEA, which coordinates release of strategic petroleum reserves (SPR) among developed countries in times of emergency, said it is important for India to expand its reserves.

REFINERY INVESTMENTS

India is the world’s fourth largest oil refiner and a net exporter of refined fuel, mainly gasoline and diesel.

India has drawn plans to lift its refining capacity to about 8 million bpd by 2025 from the current about 5 million bpd.

The IEA, however, forecasts India’s refining capacity to rise to 5.7 million bpd by 2024.

This would make “India a very attractive market for refinery investment,” IEA said.

Drawn to India’s higher fuel demand potential, global oil majors like Saudi Aramco, BP, Abu Dhabi National Oil Co and Total are looking at investing in India’s oil sector.

Saudi Aramco and ADNOC aim to own a 50 per cent stake in a planned 1.2-million bpd refinery in western Maharashtra state, for which land is yet to be acquired.

New Delhi, Jun 13: Petrol price on Saturday was hiked by 59 paise per litre and diesel by 58 paise as oil companies for the seventh day in a row adjusted retail rates in line with costs since ending an 82-day hiatus in rate revision.

Petrol price in Delhi was hiked to Rs 75.16 per litre from Rs 74.57, while diesel rates were increased to Rs 73.39 a litre from Rs 72.81, according to a price notification of state oil marketing companies.

Rates have been increased across the country and vary from state to state depending on the incidence of local sales tax or VAT.

This is the seventh daily increase in rates in a row since oil companies on Sunday restarted revising prices in line with costs, after ending an 82-day hiatus.

In seven hikes, petrol price has gone up by Rs 3.9 per litre and diesel by Rs 4.

The freeze in rates was imposed in mid-March soon after the government hiked excise duty on petrol and diesel to shore up additional finances.

Oil PSUs Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), instead of passing on the excise duty hikes to customers, adjusted them against the fall in the retail rates that was warranted because of a decline in international oil prices.

Dubai, May 5: Tickets on repatriation flights from UAE to India, which start on May 7, could be costlier than regular airfare, and adding to the financial woes of those flying back. Nearly 200,000 Indians in the UAE have registered on the website seeking to return home.

“A one-way repatriation ticket to Delhi will cost approximately Dh1,400-Dh1,650 - this would earlier have cost between Dh600-Dh700 [during these months],” said Jamal Abdulnazar, CEO of Cozmo Travel. “A one-way repatriation flight ticket to Kerala would cost approximately Dh1,900-Dh2,300.”

This can be quite a burden, as a majority of those taking these flights have either lost their jobs or are sending back their families because of uncertainty on the work front. To now have to pay airfare that is nearly on par with those during peak summer months is quite a blow.

Sources said that officials in Indian diplomatic missions have already initiated calls to some expats, telling them about likely ticket fares and enquiring about their willingness to travel.

Although many believed repatriation would be government-sponsored, Indian authorities have clarified that customers would have to pay for the tickets themselves. Those who thought they were entitled to free repatriation might back out of travel plans for now.

Fact of life

But aviation and travel industry sources say higher rates cannot be escaped since social distancing norms have to be strictly enforced at all times. That would limit the number of passengers on each of these flights.

“One airline can carry only limited passengers - therefore, multiple airlines are likely to get the approval to operate repatriation flights,” said Abdulnazar. “Also, airports will have to maintain safe distance for passengers to queue up at immigration and security counters.

“Therefore, it is recommended that multiple carriers fly into multiple Indian airports for repatriation to be expedited.”

The Indian authorities, so far, have not taken the easy decision to get its private domestic airlines into the rescue act. Gulf News tried speaking to the leading players, but they declined to provide any official statements. So far, only Air India, the national airline, has been commissioned to operate the flights.

Air India finds itself in the driver's seat when it comes to operating India's repatriation flights. To date, there is no confirmation India's private airlines will be allowed to join in.

UAE carriers ready to help out

UAE’s Emirates airline, Etihad, flydubai and Air Arabia are likely to also operate repatriation flights to India after Air India implements the first phase of services.

“We are fully supporting governments and authorities across the flydubai network with their repatriation efforts, helping them to make arrangements for their citizens to return home,” said a flydubai spokesperson.

“We will announce repatriation flights as and when they are confirmed, recognising this is an evolving situation whilst the flight restrictions remain in place.”

An AirArabia spokesperson said the airline is ready to operate repatriation flights when the government tells them to.

Travel agencies likely to benefit

Apart from operating non-scheduled commercial flights, the Indian government is also deploying naval ships to bring expat Indians back. Sources claim the ships are to ferry passengers who cannot afford the repatriation airfares.

Even then, considering the sheer numbers who will want to get on the flights, travel agencies are likely to see a surge in bookings since airline websites alone may not cope with the demand set off in such a short span.

Learn from Gulf governments

In instances when they carried out their own repatriation flights, some GCC governments paid the ticket fares to fly in their citizens. Those citizens who did not have the ready funds could approach their diplomatic mission and aid would be given on a case-to-case basis.

Should Indians wait for normal services to resume?

Industry sources say that those Indians wanting to fly back and cannot afford the repatriation flights should wait for full services to resume once the COVID-19 pandemic settles.

But can those who lost their jobs or seen steep salary cuts stay on without adding to their costs? And is there any guarantee that when flight services resume, ticket rates would be lower than on the repatriation trips.

As such, normal travel is expected to pick up only after the repatriation exercise to several countries is completed. UAE-based travel agencies are not seeing any bookings for summer, which is traditionally the peak holiday season.

“Majority want to stay put unless full confidence is restored,” said Abdulnazar. “I expect full normalcy to be restored not until March 2021.

“People have also taken a hit to their income. Without disposable income, you will curtail your travel.”

What constitutes normalcy?

Airfares are expected to remain high, given the need to keep the middle seats empty to practise safe distance onboard.

“We expect holiday travel to resume by October or November - but, the travel sentiment will not go back to pre-COVID-19 levels anytime soon,” said Manvendra Roy, Vice-President – Commercial at holidayme, an online travel agency. “The need to keep the middle seat vacant will add 30-40 per cent pricing pressure per seat from an airline perspective.

“This will make holidays more expensive.”

As for business travel, it will take some time to recover. Corporate staff are now used to getting work done via conference calls. “Companies will also curtail their travel expenditure since their income has taken a hit,” said Abdulnazar.