India’s demand petrol and diesel The first half of July declined compared to the previous month as the onset of monsoon reduced consumption and restricted mobility in some areas, preliminary industry data showed on July 17.
Consumption of diesel, the most widely used fuel in the country, declined by 13.7% to 3.16 million tonnes during July 1-15, from 3.67 million tonnes in the same period last month.
Monsoon arrival and intensity Diesel demand in the country is heavily burdened and consumption is traditionally lower in July-September than in April-June. Floods disrupt mobility and demand from the agricultural sector, which uses diesel in irrigation pumps and trucking, diminishes with the onset of rains.
Although diesel demand was up about 27% year-on-year, supported by strong economic growth and a relatively low baseline for the same period in 2021, when a second wave of COVID-19 hit the economy.
The data shows that diesel consumption during July 1 to 15 of 2020 was 43.6% higher as compared to 2.2 million tonnes. It was 13.7% higher than before July 2019.
Petrol sales fell 7.8% to 1.27 million tonnes in the first half of July, as against 1.38 million tonnes in the same period last month.
However, consumption was 23.3% higher as compared to July 2021 and 46% higher than the first fortnight of July 2020. It was 27.9% higher than before July 2019.
Auto fuel demand in June was supported by an increase in summer travel to cooler regions of the country and educational institutions to avoid holidays during the annual holiday.
As the aviation sector opens up, India’s overall passenger traffic (both domestic and international) at airports approached pre-COVID-19 levels.
Accordingly, jet fuel (ATF) demand grew by 77.2% to 247,800 tonnes during July 1 to 15, as compared to year-on-year. It was 125.9% higher than July 2020, but 17.7% lower than pre-Covid July 2019. Month-on-month, sales fell 6.7%.
With strong economic growth of 7.1%, oil demand in India continues to rise as the country eases the pandemic lockdown.
“Monsoon months are traditionally low consumption months, but overall oil demand will continue on its growth trajectory for the rest of the year,” said an industry official.
The government had imposed a nationwide lockdown on March 25, 2020, to control the spread of coronavirus. The complete lockdown, which halted mobility and paralyzed business, was gradually eased after two months.
LPG sales in the first half of July grew by 14.15% year-on-year to 1.24 million tonnes. This is despite the ₹50 per cylinder hike in prices.
LPG consumption was 16.6% higher as compared to July 2020 and 8.6% higher as compared to July 2019.
The data showed month-on-month demand growth of 8.3 per cent as compared to 1.15 million tonnes of LPG consumption during the first half of June.