Petrol, diesel sales surge in December as economy picks up momentum

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| Photo Credit: Reuters

India’s petrol and diesel demand soared in December as increased consumption in the agriculture sector helped build on the momentum generated by the festive season, preliminary industry data showed on Sunday.

Petrol sales soared 8.6% to 2.76 million tonnes in December, as compared to 2.54 million tonnes of consumption in the same month last year.

Sales were 13.3% higher than in COVID-marred December 2020 and 23.2% more than in pre-pandemic December 2019.

Month-on-month, the demand was up 3.7% on the high base festive season created since October.

Diesel, the most used fuel in the country, posted a 13% rise in sales in December to 7.3 million tonnes, as compared to the same month last year.

Consumption was up 14.8% over December 2020 and 11.3% higher than pre-COVID 2019.

Diesel sales, however, dipped marginally by 0.5% when compared with November 2022.

Petrol and diesel sales were the highest since June.

Industry sources said diesel demand has been surging on pick up in the agriculture sector. Use of the fuel in irrigation pumps and trucking has helped build the momentum generated from the festive season demand push in October. Rabi crop sowing led to a pick-up in economic activity and a rise in demand.

Auto fuel sales had dipped in July and August owing to the monsoon and reduced demand.

As the aviation sector opened up, India’s overall passenger traffic at airports inched closer to pre-COVID-19 levels.

Reflecting the trend, jet fuel (ATF) demand jumped 18% to 606,000 tonnes during December when compared to the same month last year. It was 50.6% higher than December 2020 but 12.1% lower than pre-COVID December 2019.

Sources said while domestic air travel is back to pre-COVID levels, international traffic is lagging because of continued restrictions in some countries.

India’s recovery has continued to gain momentum in recent months but has been accompanied by elevated inflation. This slowed the momentum a bit in July-September. The country’s oil demand has been rising steadily since the easing of COVID-19 restrictions.

Cooking gas LPG sales were up 7.7% year-on-year at 2.72 million tonnes in December. LPG consumption was 7.7% higher than in December 2020 and 15.9% more than in December 2019.

Month-on-month, the demand was up 6.47% when compared to 2.55 million tonnes of LPG consumption during November, the data showed.