【Ferro-alloys.com】India's jet fuel demand is ready for take-off as the country plans to open its doors to international tourists and forms more air travel bubbles, while domestic travel has surged as the local COVID-19 situation has mostly stabilized, with the total number of doses administered in the world's second most populous country crossing 1 billion.
According to the latest data from India's Directorate General of Civil Aviation, or DGCA, passengers carried by domestic airlines in October rose 70.46% month on month and those carried during January-October registered an annual growth of 25.88%.
"October was the peak holiday season for India. So, there has been an increase in domestic travel," a trader based in Singapore said.
"There were various lockdown and COVID-19 restrictions in India last year. So, I would expect that as soon as people can travel, they would," he added.
This also resonates with a survey commissioned by IATA of 4,700 respondents in 11 markets including India in September. The survey demonstrated confidence that the risks of COVID-19 can be effectively managed and that the freedom to travel should be restored, IATA said in a statement on Oct. 5.
"People want to travel. 86% expect to be traveling within six months of the crisis ending," Willie Walsh, IATA's director general said that time.
"With COVID-19 becoming endemic, vaccines being widely available and therapeutics improving rapidly, we are quickly approaching that point in time," Walsh added.
Although India's DGCA in its latest circular on Oct. 29 said the suspension of scheduled international commercial passenger flights to or from India had been extended till Nov. 30, it noted that international travel may be allowed on select routes by the authorities on a case-to-case basis.
This move aligns with its intention of relaxing restrictions, sources said.
Singapore and India, for example, have already made some headway in this regard. On Nov. 21, the Civil Aviation Authority of Singapore said it had reached an agreement with the Ministry of Civil Aviation of India on the resumption of scheduled commercial passenger flights between Singapore and India.
This will facilitate quarantine-free travel on the Vaccinated Travel Lane (VTL) from India to Singapore, which will start from Nov. 29, with six designated VTL flights daily from Chennai, Delhi and Mumbai.
October data rejuvenates
India's jet fuel consumption rose to a 19-month high in October, latest data released by the Petroleum Planning and Analysis Cell, or PPAC, showed Nov. 11.
Jet fuel demand was up 17.11% on the month, and 34.93% on the year at 479,000 mt in October, the data showed. This was the country's highest consumption of jet fuel since March 2020 when demand was registered at 484,000 mt.
Over January-October, aviation fuel demand totaled 3.87 million mt, up 11.87% from the same period in 2020.
Indian refiners expect a higher run in the coming months on improved demand for aviation fuels as domestic airlines have started flights to international routes with the relaxation in coronavirus protocols, oil ministry officials said Nov. 23, adding that demand has also received an impetus as the the threat of a third wave of COVID-19 has receded.
"We expect the demand for jet fuel to reach the pre-coronavirus levels of 2019 in the second half of 2022 if there would be no third wave of the pandemic," said an official working with one of the state-run refiners.
"There is a lot of travel optimism due to loosened restrictions, pent-up leisure demand combined with festive and marriage season in India," Shreyans Baid, South Asia oil market analyst with S&P Global Platts Analytics said.
"We expect India's Q4 kerosene/jet demand to grow by 33% over the previous quarter but that will still be some 24% below pre-pandemic levels of Q4 2019 in absence of full-fledged opening up of international travel," Baid said.
Jet fuel prices propped up
"India's jet fuel demand is expected to remain supported in the near term because there is a huge domestic market," another Singapore-based trader said.
"The country has also started welcoming fully vaccinated travelers after close to two years of border restrictions so jet fuel demand will see further support," the same trader added.
At the 0830 GMT Asian close Nov. 24, the FOB Singapore jet fuel/kerosene cash differential was assessed at plus 24 cents/b to the Mean of Platts Singapore jet fuel/kerosene assessments, up 4 cents/b on the day, Platts data showed.