Diesel sales fall 15% in first half of August
The dip in fuel consumption is attributed mainly to travel disruptions caused by the floods in some parts of the country
India’s fuel consumption has been on the rise ever since the lockdown curbs were eased and travelling picked up the pace. It, however, fell in the first half of August due to demand tapering off and monsoon rains hindering travelling.
The consumption of diesel contracted by over 15% in the first two weeks of August when compared to the same period in the previous month. However, when compared to the same period in 2019, it has fallen by close to 8%. Diesel consumption is considered to be a key indicator of economic growth and signifies trends in travel, be it private, public, or industrial. However, as per primary data, the annual growth in fuel consumption remains constant even though the pace was slower in August compared to July.
During the first fortnight of August, the sale of petrol fell by close to 5% compared to the previous month. This is the first time petrol sales have declined on a monthly basis since May.
Key economic indicator
Diesel accounts for over two-fifths of the overall fuel consumption in India. A dip in its sales highlights the weakness in the country’s economic activities and overall mobility. Industry executives, however, are unperturbed with this fall in demand. They have attributed this to the disruption in mobility via road due to floods in some portions of the country and a fall in demand for operating pumps from the agricultural sector.
Sales of jet fuel in the first two weeks of August were 25% higher than in July as air travel has picked up the pace and the number of flights has also increased. However, the sales were 45% lower when compared to the same period in 2019. LPG sales have gone down by 2% compared to the same period of last month as well as of 2019.
In July, petroleum consumption had topped the pre-pandemic levels for the first time in almost a year and a half. Diesel sales, however, fell short by 11%.
Market data suggests that state-run fuel retailers sold close to 3.5% more petrol than in the same period in 2019. These companies control almost 90% of the fuel market of India.