India's fuel sales drop 9.4% in April on COVID wave

New Delhi: India’s fuel demand slumped 9.4% in April when compared to the preceding month as lockdowns clamped in several states to curb the second wave of coronavirus sweeping the nation pummelled demand, official data showed on Wednesday.

Fuel consumption fell 9.38% to 17.01 million tonnes in April from 18.77 million tonnes in March, data from Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC) showed.

India was under one of the world’s severest lockdowns in April 2020, bringing to a halt almost all economic activity. Fuel sales had halved that month, plunging to the lowest since 2006. Comparing on a yearly basis, fuel demand surged 81.5% from April 2020 lows.

Sales of petrol — used in cars and motorcycles — fell to 2.38 million tonnes in April, the lowest since August. Petrol sales in April were 13% lower than March 2021 and 3% lower than April 2019. Petrol sales in April 2020 were 9,72,000 tonnes.

Demand for diesel — the most used fuel in the country — fell to 6.67 million tonnes in April 2021, down 7.5% from the previous month and 9% from April 2019. Diesel sales in April 2020 were 3.25 million tonnes.

With airlines continuing to operate at less than capacity, jet fuel (ATF) sales in April were 4,09,000 tonnes, down 14% over March 2021 and 36.7% over April 2019. Jet fuel sales in April 2020 were 5,500 tonnes.

Sales volume of cooking gas LPG fell 6.4% to 2.1 million tonnes in April 2021 when compared to the previous month. The sales were 11.6% higher than 1.9 million tonnes in April 2019.

Bitumen, used in making roads, consumption fell to 6,58,000 tonnes in April 2021 from 9,04,000 tonnes in the previous month. It was lower than 6,91,000 tonnes sales in April 2019.

Indian authorities are scrambling for vaccines, medicines and oxygen as the nation faces its worst health crisis. Death crossed 2.5 lakh on Wednesday in the deadliest 24 hours since the pandemic began, as the disease rampaged through the countryside.

Deaths swelled by a record of 4,205, while infections rose 3,48,421 in the 24 hours to Wednesday. The death toll now stands at 2,54,197, while the total caseload stands at 2.33 crore.

Fuels sales could have been worse in April, but the elections in some states saw increased use of vehicles for campaigning. Demand is likely to witness a sharper slump in May due to more impending restrictions.

Declining fuel sales will reduce crude intake by refiners, reducing operating run rate.

“India’s 2Q21 (April-June) oil demand is projected to be impacted by the recent surge in COVID-19 infection cases,” OPEC said in its monthly oil report.

“Recent mobility data show weakness in performance towards the end of April and this is anticipated to last well into the month of May and possibly June putting the whole 2Q21 oil demand performance in check.” However, some support might emerge from increased usage of private vehicles over public transportation, which could cap declines in transportation fuels demand, it said.

OPEC forecast an 11% growth in fuel demand to 4.88 million barrels per day.

Projections, it said, will depend on many factors that will affect the magnitude of the impact on the demand.

“These include government containment measures which are projected to be localised and targeting specific regions, the speed of vaccination rollouts and their positive impact on reducing hospitalisation and death rates, and lastly how quickly the population will adapt to COVID-19 measures,” it said.