Fuel demand declined 11.4% in November after festival boost

India’s fuel consumption fell in November after scaling a seven-month peak in the preceding month, government data showed, as demand eased in the world’s third-biggest oil consumer after the festival season.

Fuel consumption, a proxy for oil demand, totalled 17.13 million tonnes, down 4% from October and was 11.4% lower than a year ealier, data from the oil ministry’s Petroleum Planning and Analysis Cell showed.

Fuel demand rose in October to a seven-month peak, while gasoline sales surged to an all-time high, as festivals boosted mobility and economic activity.

“Drop-off in demand points to seasonal factors,” said Ed Moya, senior market analyst at brokerage OANDA.

“However, fuel demand outlook remains upbeat going into 2022 as COVID is not really impacting the country and [there is] good growth outlook on continued reopening momentum.”

India’s festival season ended in early November.

Consumption of diesel, which accounts for about 40% of India’s refined fuel sales, also eased 1.7% month-on-month to 6.51 million tonnes and was down 14% compared with November 2019.

Diesel sales slid 7.6% from the same period last year.

Sales of petrol, decreased by about 0.7% year-on-year to 2.65 million tonnes, but were 4.4% higher from November 2019. They were down 3.6% from October.

Asia’s third-largest economy, last month said it would release 5 million barrels of oil from its strategic reserves in coordination with other buyers including the U.S., Japan and South Korea.