Ratings agency ICRA in its latest report has said that the domestic demand for petroleum products is expected to increase at a healthy rate of 8 to 10 per cent in next financial year (FY22) on a year-on-year basis. 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.
Furthermore, the report pointed out capex and investments are expected to be healthy in FY22, as companies make up for the time lost due to restrictions and lockdowns in FY21. It said a clearer outlook on demand and prices, and a greater impetus for local manufacturing under 'Aatmanirbhar Bharat' are expected to spur demand over the long term.