Why India's upcoming general election is good news for the oil market

Election campaigning will boost fuel use in a nation where oil demand is already growing at the fastest pace in the world.

The largest democratic exercise on Earth is set to give the oil market a shot in the arm.

About 875 million Indians will go to polls over the next three months to elect their leader, dwarfing the 158 million Americans who registered to vote in the 2016 US residential elections. Before they vote, they’ll be courted by a slew of competing political parties -- a process that will boost fuel use in a nation where oil demand is already growing at the fastest pace in the world.

The lift will be provided by hordes of party faithful, who traverse teeming cities and remote villages across the world’s seventh-largest country in a campaigning frenzy before what’s expected to be a closely fought election. Their use of motorcycles and sports utility vehicles at a time when some refineries are closed for maintenance will support returns from making fuels in Asia over the next few months, according to a Bloomberg survey of traders who participate in the market.

“The election, which coincides with scheduled maintenance, should see India pull imports of gasoil and gasoline and this usually adds to bullish sentiment,” said WengInn Chin, a senior oil market analyst at Facts Global Energy in Singapore. In the lead up to the polls, the increased consumption is expected to increase gasoline and diesel demand by as much as 80,000 barrels a day, he said.

That will be in addition to the nation’s already growing demand for gasoline and diesel, consumption of which grew by about 75,000 barrels a day and 100,000 barrels a day, respectively, in January. Demand for liquefied petroleum gas is also surging, with state refiners seeking to import cargoes of the cooking fuel as the government tries to keep voter morale high by ensuring rural households are well supplied.

The profit from turning crude into diesel reached a two-month high late last month, and has climbed over 25 percent so far this year. Refinery maintenance will keep supplies tight in coming months, while the International Maritime Organization’s new rules on ship fuel next year will drive the fuel’s demand in the longer term. That’s set to keep the so-called crack at an average of $14.50 a barrel this month, according to the Bloomberg survey of traders.

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Why Mukherjee's Nagpur visit should worry BJP brass more than Congress

Some in the Congress have criticised Mukherjee for accepting the RSS invite, arguing that would give legitimacy to the RSS, but others have for months advised the Congress against attacking the RSS.

In the past two years, Rashtriya Swayamsevak Sangh (RSS) chief Mohan Bhagwat has called on former president Pranab Mukherjee on four occasions. Two of these meetings took place while Mukherjee was still a resident of the Rashtrapati Bhavan, and the two subsequent meetings were held at his new address – 10, Rajaji Marg.



These meetings have helped Mukherjee and Bhagwat develop mutual respect for each other. Bhagwat has come to admire Mukherjee’s knowledge of Indian history and his understanding of the Hindu social reform that began in Bengal in the 19th Century.



Mukherjee attaches much importance to preserving the robustness of institutions to keep democracy alive in India, and it is likely that the subject would have come up during his discussions with Bhagwat. In turn, Mukherjee has come to appreciate the various social service projects that RSS undertakes, particularly in the northeastern states.



Bhagwat had invited Mukherjee at least on four earlier occasions to attend an RSS event. Mukherjee refused as he didn’t deem it fit that a serving President of India should attend an event of an organisation with a contentious record. Eventually, the former president relented and accepted the latest invite.



A lifelong Congressman with strong secular credentials, Mukherjee is likely to speak at the RSS event on the subject of India’s civilisational ethos of inclusive nationalism, espoused in modern times by such thinkers as Rabindranath Tagore and Swami Vivekananda. It would be interesting to see if Mukherjee chooses to quote Nehru’s criticism of the RSS. Mukherjee’s speech will be keenly followed across the country.



Some in the  Congress have criticised Mukherjee for accepting the RSS invite, arguing that Mukherjee’s presence would give legitimacy to the RSS.



But there are others who have, and for months now, advised the Congress leadership against attacking the RSS. According to sources in the Congress, over the past year, the RSS has reached out to some of the Congress leaders. The RSS pointspersons have told the Congress that the Sangh is a “nationalist organisation”, which has in the past supported the Congress, particularly Indira Gandhi and Rajiv Gandhi, on specific issues.

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