India’s Fuel Demand Falls For The Third Straight Month
India continued to consume fewer petroleum products than a year earlier even as economic activities picked up.
Usage of petroleum and related products, including auto and industrial fuels, declined 3.9% year-on-year in January, according to monthly data released by the Petroleum Planning & Analysis Cell. The aggregate demand also fell 3.3% over the preceding month—the first such drop since August.
Consumption in absolute terms stood at 18.01 million metric tonnes in January 2021 compared with 18.62 MMT in December.
“The consumption has fallen in January mainly due to waning pent-up demand and with the end of the festive season,” Urvisha H Jagasheth, research analyst at CARE Ratings, said in an emailed response to BloombergQuint. “The decline in demand for diesel, ATF (aviation turbine fuel), kerosene, lubes, naphtha, petcoke, and FO & LSHS (furnace oil & low sulphur heavy stock) has mainly led to the overall decline in consumption.”
Volumes from April 2020 to January 2021 stood at 88.1% that of the level seen in the prior year.
Petrol & Diesel Consumption
Consumption of petrol rose for the fifth straight month, with a volume of 2.61 MMT in January.
Improved sales of passenger vehicles and two-wheelers as people opted for personal mobility over public transportation amid the pandemic aided petrol consumption.
The consumption of high-speed diesel—used in medium- and high-speed compression ignition engines—however, declined 2.2% over the year earlier to 6.8 MMT in January. Schools and educational institutions remained shut in most parts of the country, restricting movement of buses and other transportation vehicles.
“Diesel consumption is linked to the scale of economic activities. The consumption is getting impacted as the economy has not yet attained the pre-Covid level. The economy is still inching towards normalcy and trying to regain its pre-Covid momentum,” Jagasheth said.
- Kerosene consumption continued to fall, with all union territories, barring Jammu & Kashmir and Ladakh, and states of Andhra Pradesh, Delhi, Haryana, and Punjab, has been declared kerosene free.
- LPG consumption rose 2.4% year-on-year, helped by increased domestic cooking. LPG coverage in India, according to PPAC, has risen from 94.3% in 2019 to 99.6% as of Feb. 1, 2021. The rise in consumption, Jagasheth said, can be ascribed to an increase in the use of LPG by households and refills under the Pradhan Mantri Ujjwala Yojana.
- With international air traffic curtailed because of global restrictions to prevent the spread of the pandemic, consumption of aviation turbine fuel slumped 42%.
- Naptha consumption fell 10.4% year-on-year due to weak demand from the petrochemicals and fertiliser industries.