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India's crude oil imports in December hit their highest level in a year as strong demand prospects in the world's third-largest oil consumer and importer prompted refiners to stock up.

Crude oil imports last month rose 7.1% versus November to 19.65 million tonnes, data on the website of the Petroleum Planning and Analysis Cell (PPAC) showed on Monday.

However, imports were down 4.1% compared with a year earlier and were 5% higher from December 2019 before the onset of the pandemic.

"Indian oil demand continues to recover. Refinery margins remain relatively healthy, which is an incentive for refiners to continue to boost runs," said Refinitiv analyst Ehsan Ul Haq.

"People are avoiding public transport as far as it is possible and the usage of passenger cars increases gasoline demand - the main pillar of demand growth at present. The only problem is high oil prices, which might limit demand growth in the next few months."

The relatively high imports corresponded with the country's oil demand scaling a nine-month peak last month, with gasoline sales hitting an all-time high. [O/INDIA2]

But Julie Torgersrud from Rystad Energy's Oil Market team projected India's diesel demand to decrease by around 100,000 barrels per day in January due to the recent impact of Omicron spread, while gasoline demand to remain flat.

"We expect refinery runs to grow by another 500,000 bpd in 2022, as the demand recovery progresses, and new refinery capacity is projected to start up." [O/INDIA1]

India's Reliance Industries, owner of the world's biggest refining complex, last month imported 1.14 million barrels per day (bpd) of oil, a decline of about 8% from November.

Oil product imports fell 2.9% to 3.88 million tonnes from a year earlier, while exports jumped 30.6%. Of the 6.13 million tonnes of exports in December, diesel accounted for 3.21 million tonnes.

Asia's third-biggest economy imports and exports refined fuels as it holds surplus refining capacity.