India's recovery in petroleum product demand to continue: Fitch

The recovery, it said, should support higher throughput at most rated oil marketing companies.

"We expect strong prices to improve the financial profiles of upstream oil and gas companies," the ratings agency said.

"We forecast capex to stay high as oil marketing companies expand their refining capacity and retail networks, and upstream companies enhance production."

Besides, the ratings agency said it expect stable crude oil production, which should marginally increase in FY23 as upstream producers continue to invest in exploration and development.

Furthermore, it cited that India's natural gas production increased by 22 per cent YoY in April-December 2021 and the momentum is likely to continue over the next 12-18 months, driven by expanded production at new fields, before stabilising in FY23. "We believe rising domestic production and higher liquefied natural gas (LNG) spot prices are likely to weigh on LNG imports through to 1HFY23."

"However, LNG imports should rise steadily over the medium-term as consumption picks up pace."