Petrol, diesel sales fall as monsoon ebbs demand

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| Photo Credit: Bhagya Prakash K

India’s petrol and diesel consumption fell in the first half of July as fury of monsoon flipped travel plans and reduced the demand in the agricultural sector, preliminary industry data showed.

Demand for diesel, the most consumed fuel in the country accounting for about two-fifths of the demand, fell 15% to 2.96 million tonnes in July 1- July 15, compared to the year-ago period.

Consumption of diesel, which had soared 6.7% and 9.3% in April and May, respectively, as agriculture demand picked up and cars yanked up air-conditioning to beat the summer heat, has tapered since the second half of June after the monsoon set in.

Month-on-month sales fell almost 20%, when compared with 3.68 million tonnes of diesel consumed in June 1- June15.

Petrol sales dropped 10.5% to 1.25 million tonnes during the first half of July 2023, when compared with the same period last year. Sales were down 10.8% month-on-month, the data showed.

Both the manufacturing and services sectors in India have been in expansion territory to support oil demand for over one year.

This led to petrol and diesel sales rising since the second half of March. But the arrival of monsoon has cooled temperatures and reduced demand for running diesel gensets to irrigate fields as well as cut down consumption in tractors and trucks.

For the year, India’s oil demand is forecast at 0.2 million barrels per day year-on-year, according to oil cartel OPEC’s monthly oil bulletin.

Consumption of petrol during July 1 to 15 was 12.5% more than COVID-marred July 2021 and 16.6% more than pre-pandemic July 1-15, 2019.

Diesel consumption was up 10.1% over July 1-15, 2021 but 1.1% less than in the first half of July 2019.

With the continuing rise in passenger traffic at airports, jet fuel (ATF) demand rose 6.1% to 301,800 tonnes during July 1 to 15, as compared to the same period last year.

It was more than double that of the first half of July 2021, but 5.9% lower than pre-COVID July 1-15, 2019.

Month-on-month jet fuel sales fell 6.7% when compared with 323,500 tonnes in June 1-15, 2023.

The country’s oil demand during the last few months was supported by strong industrial activity, industry officials said.

Cooking gas LPG sales were down 6.3% year-on-year to 1.27 million tonnes in July 1-15. LPG consumption was 6 per cent higher than in July 2021 and 3.7 per cent more than pre-COVID July 1-15, 2019.

Month-on-month, LPG demand was up 3.8% compared to 1.22 million tonnes of LPG consumption during the first half of June, the data showed.