Fuel offtake dips most since April

Aug. diesel sales fall 12% from July, total petro products demand slumps 16% y-o-y

India’s fuel demand in August posted its biggest decline since April as local lockdowns put the brakes on economic activity and transportation, official data showed on Thursday.

Petroleum product sales fell to 14.39 million tonnes in August, down 7.5% over the previous month, and about 16% from a year earlier, data from the oil ministry’s Petroleum Planning and Analysis Cell (PPAC) showed.

Decline extends

The decline in August was the sixth consecutive year-on-year slide.

Fuel demand had slumped by a record 48.6% in April to 9.4 million tonnes as the government imposed a nationwide lockdown in an attempt to curb the spread of the novel coronavirus.

It recovered in the subsequent two months, but has been falling again since July, on a monthly basis.

Sale of diesel, the most consumed fuel in the country, fell 12% to 4.84 million tonnes in August, from 5.51 million tonnes in the previous month. On an annual basis, the demand for diesel declined by 20.7%.

Petrol sales fell 7.4% year-on-year to 2.38 million tonnes, although it rose 5.3% from 2.26 million tonnes in July as commuters preferred driving to using public transportation.

LPG sales were down 5% year-on-year to 2.2 million tonnes, while kerosene demand fell 43% to 1,32,000 tonnes. Month-on-month, the sale was almost flat. Industry sources said reaching pre-COVID-19 sales may take at least 3-4 months.

Demand recovery

There is likely to be a pick-up in demand with the onset of the festive season in October-November, but reaching pre-COVID-19 levels would not be before the new year, they said.

Oil Minister Dharmendra Pradhan had previously stated that sales would return to normal by festival season but the local lockdowns being imposed in several States has prolonged the return to normalcy.

Naphtha sales at 1.07 million tonnes was down 16% over July demand. It was over 24% lower than the consumption of 1.4 million tonnes in August 2019.

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