Government data on Friday showed that India's fuel demand in September rose for the first time since June as easing coronavirus restrictions supported economic activity and travel, however, consumption remained weaker than the same month a year earlier.
Consumption of refined fuels, a proxy for oil demand, rose 7.2 percent in September from the prior month to 15.47 million tonnes, the first monthly increase since June when demand rose to 16.09 million tonnes.
However, demand fell 4.4 percent from the same period a year earlier, posting its seventh consecutive year-on-year slide, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed.
Demand in August was the weakest since April due to a decline in economic activity and transportation amid restrictions.
Diesel consumption, a key parameter linked to economic growth and which accounts for about 40 percent of overall refined fuel sales in India, rose 13.2 percent to 5.49 million tonnes last month from 4.85 million tonnes in August.
On an annual basis, demand for diesel fell about 6 percent.
Sales of gasoline, or petrol, rose 3.3 percent from a year earlier to 2.45 million tonnes, and by 2.9 percent from 2.38 million tonnes in August.
Cooking gas or liquefied petroleum gas (LPG) sales increased by 4.8 percent to 2.27 million tonnes from a year earlier, while naphtha sales rose 2.9 percent to 1.14 million tonnes and by 5.7 percent from August.
Sales of bitumen, used for making roads, rose 38.3 percent from last year, and fuel oil decreased by 7.4 percent and by about 4.1 percent month-on-month.
With the daily number infections in India still peaking for now, people have postponed their travel plans or large purchases. Also, as most employers were forced to opt for work-home facility for their employees, there has been a cut in demand for taxi services and other public transport movement.
The country's factory activity, measured by PMI, showed that the growth was at its fastest pace in more than eight years in September, despite layoffs.