Thursday, June 03, 2021

Jet fuel to remain grounded as India extends international flight ban

India's recent move to extend a suspension of international flight operations until end-June is set to further weigh on jet fuel demand and cap any significant gains in prices of the aviation turbine fuel, as the country faces the daunting task of accelerating its COVID-19 vaccination pace after the devastating second wave, industry sources told S&P Global Platts.

Register Now "The outlook for jet fuel demand in India is not looking good for the next three-four months. The confidence to travel extensively won't be back until the vaccination process is accelerated," said a senior official at a state-run refiner.

The extension of the international flight ban in India spells trouble for the sector, another source with an Indian refiner said.

A May 28 Twitter post by India's Directorate General of Civil Aviation said the competent authority had extended the suspension of scheduled international commercial passenger flights to or from India till 2359 local time June 30. International travel may be allowed on selected routes on a case-by-case basis. The earlier suspension was until May 31.

India's aviation fuel demand tumbled 13.89% month on month to 409,000 mt in April, a five-month low, according to latest data from the Petroleum Planning and Analysis Cell, or PPAC. This was a manifestation of tepid domestic demand for aviation fuel and weaker jet fuel margins.

"India's demand for jet fuel is also extremely low due to the rising infections in the region," a Singapore-based trading source said.

Asia-Pacific regional airlines carried just 1.1 million international passengers in April, representing a mere 3.5% of passenger volumes recorded in the same month of pre COVID-19 times in 2019, according to the latest report by the Association of Asia Pacific Airlines, or AAPA.

"The emergence of different variants with higher transmissibility rates has deterred Asian economies from reopening their borders, with extended quarantine requirements further suppressing international travel demand," AAPA director-general Subhas Menon said.

03/06/21 Surabhi Sahu, Ng Jing Zhi,Sambit Mohanty/S&P Global

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