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Fuel demand in India continues to decrease amid rainy season

New Delhi: Preliminary industry data showed Tuesday that diesel demand in India fell for the second month in a row as monsoon rains reduced consumption in key sectors such as agriculture. The demand for gasoline and diesel decreased month on month in July. While petrol consumption was nearly flat in the first half of August, […]

Edited By : Vikas Kumar | Updated: Aug 18, 2022 16:03 IST
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New Delhi: Preliminary industry data showed Tuesday that diesel demand in India fell for the second month in a row as monsoon rains reduced consumption in key sectors such as agriculture.

The demand for gasoline and diesel decreased month on month in July. While petrol consumption was nearly flat in the first half of August, demand for diesel, the most widely used fuel in the country, fell 11.2 percent from August 1-15 to 2.82 million tonnes from 3.17 million tonnes the previous month.

The arrival and intensity of the monsoon season have a significant impact on diesel demand in the country, and consumption is traditionally lower in July-September than in April-June. The monsoon reduces mobility, and demand from the farm sector, which uses diesel in irrigation pumps and trucking, decreases as the rains arrive.

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Diesel demand, on the other hand, increased by 32.8 percent year on year, owing to strong economic growth and a relatively low baseline for the same period in 2021, when the second wave of COVID-19 had an impact on the economy.

Diesel consumption was 58.2% higher than the 1.78 million tonnes demand during August 1-15, 2020. According to the data, it was 23% higher than before COVID in August 2019.

Petrol sales increased 0.8% to 1.29 million tonnes in the first half of August, compared to 1.28 million tonnes in the same period the previous month.

Consumption was 30.6 percent higher than in August 2021 and 43.4 percent higher than in the first two weeks of August 2020. It was 36% higher than before COVID in August 2019.

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Summer travel to colder areas of the country to escape the heat and vacations during annual breaks at educational institutions boosted auto fuel demand in June. It then fell in July and now in August.

As the aviation sector expands, India’s overall passenger traffic (both domestic and international) at airports has increased to levels comparable to those prior to COVID-19.

As a result, jet fuel (ATF) demand increased by 42.2% year on year to 2,48,100 tonnes from August 1 to 15. It was 121% higher than August 2020, but 18% lower than pre-COVID August 2019. Sales fell 0.75 percent month over month.

With 7.1% economic growth, India’s oil demand has been steadily rising since the country lifted pandemic lockdowns.

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“Monsoon months traditionally are low consumption months but overall oil demand will continue on its growth trajectory during the rest of the year,” an industry official said.

On March 25, 2020, the government imposed a nationwide lockdown to control the spread of coronavirus. After two months, the complete lockdown, which halted mobility and crippled business, was gradually eased.

LPG sales of cooking gas increased 8.19% year on year to 1.14 million tonnes in the first half of August.

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LPG consumption was 15.3% higher than in August 2020 and 5.5% higher than in August 2019.

 

Month on month, demand fell 7.8 percent when compared to 1.24 million tonnes of LPG consumption in the first half of July, according to the data.

 

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First published on: Aug 16, 2022 04:23 PM IST

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