India's fuel demand recovery continued in August as sales of the nation's most used fuel, diesel, inched towards pre-Covid levels on easing of pandemic-related restrictions, preliminary sales data showed on Monday. Petrol sales are already above pre-Covid levels and diesel is 8 per cent short.
State-owned fuel retailers sold 0.98 million tonnes of petrol in the first half of August, up 9.4 per cent from the year-earlier period. It was 3.7 per cent higher than pre-Covid petrol sales of 0.95 million tonnes in August 1-15, 2019. Sales of diesel - the most used fuel in the country - rose 18.5 per cent to 2.11 million tonnes during August 1-15, 2021 over the previous year, but was down 7.9 per cent from August 2019.
Last month, diesel consumption was 11 per cent lower than pre-Covid levels. This is the third straight month that showed a rise in consumption since March. Fuel demand had recovered to near-normal levels in March before the onset of the second wave of COVID-19 infections led to the re-imposition of lockdowns in different states, stalling mobility and muting economic activity.
Consumption in May slumped to its lowest since August last year amid lockdowns and restrictions in several states. Fuel demand showed signs of resurgence in June after restrictions began to be eased and the economy gathered pace. On July 30, S M Vaidya, Chairman of India's largest oil firm IOC, had stated that petrol consumption has risen over pre-Covid levels as people prefer personal transport over public transport.
Diesel sales, he said, were likely to return to pre-pandemic levels by Diwali in November if a third wave of Covid infections does not lead to the reimposition of lockdown. ATF consumption, which had seen the most severe fall as air travel was restricted beginning March 2020, is likely to return to normal by the end of the current fiscal in March, he had said.
Consumption of LPG, the only fuel which showed growth even during the first lockdown because of free supplies by the government to the poor, rose 6.5 per cent year on year to 1.06 million tonnes in August 1-15. It was however 2.5 per cent lower than August 2019. With airlines yet to resume full-scale operations because of travel restrictions around the globe, jet fuel sales at 165,600 tonnes were up 47.5 per cent year on year but 45.3 per cent lower than August of 2019.
India's oil demand had dropped by 0.5 million barrels per day in 2020, led by a steep weakening in transportation fuel, mainly in April-June 2020. Extended lockdown measures, coupled with limitations on mobility, diminished oil product requirements. Petrol and jet fuel recorded historical declines compared with the same period in 2019. Diesel was down, in line with weakness in industrial activity, as well as in road construction and agriculture.