India’s Fuel Demand Dips Most Since April
An employee refuels a motorcycle as price and volume figures are displayed on a diesel and petrol gas pump at an Indian Oil Corp. gas station in Mumbai, India. (Photographer: Vivek Prakash/Bloomberg)

India’s Fuel Demand Dips Most Since April

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India's fuel demand in August posted its biggest decline since April as local lockdowns put brakes on economic activity and transportation, official data showed on Thursday.

Petroleum product sales fell to 14.39 million tonnes in August, down 7.5% over the previous month and about 16% from a year earlier, data from the oil ministry's Petroleum Planning and Analysis Cell showed.

The decline in August was the sixth consecutive year-on-year slide.

Fuel demand had slumped by a record 48.6% in April to 9.4 million tonnes as the government imposed a nationwide lockdown in an attempt to curb the spread of coronavirus.

It recovered in the subsequent two months but has been falling again since July, on a monthly basis.

Sale of diesel, the most consumed fuel in the country, fell 12% o 4.84 million tonnes in August from 5.51 million tonnes in the previous month. On an annual basis, the demand for diesel declined by 20.7%.

Petrol sales fell 7.4% year-on-year to 2.38 million tonnes although it rose 5.3% from 2.57 million tonnes in July as commuters preferred driving to using public transportation.

LPG sales were down five per cent year-on-year to 2.2 million tonnes, while kerosene demand fell 43% to 1,32,000 tonnes. Month-on-month, the sale was almost flat.

Industry sources said reaching pre-Covid-19 sales may take at least 3-4 months.

There is likely to be a pick-up in demand with the onset of the festive season in October-November but reaching pre-Covid-19 levels would not be before new year, they said.

Oil Minister Dharmendra Pradhan had previously stated that sales would return to normal by festival season but the local lockdowns being imposed in several states has prolonged the return to normalcy.

Naphtha sales at 1.07 million tonnes was down 16% over July demand. It was over 24% lower than the consumption of 1.4 million tonnes in August 2019.

Sale of bitumen, used for making roads, rose 39.1% to 3,16,000 tonnes on an annual basis but was down about 18% month-on-month.

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