India's fuel demand dips 11.7% in July after brief revival post lockdown

As India’s fuel demand witnessed a trend of recovery in June and increased by 11 per cent with economic activities resuming after three months of intense lockdown across the country, the consumption once again dipped by 11.7 per cent in July, official data showed.

Fuel consumption, a barometer of economic activity in the country, had slumped by over 45 per cent in April as nationwide lockdown halted most vehicular traffic and shut industries. However, with the easing of lock-down restrictions, the demand picked up in May and June with a month-on-month increase in consumption numbers.

However, mini-lock-downs imposed by states to contain the spread of COVID-19 seemed to have stopped this recovery, with fuel demand falling 3.5 per cent in July over the previous month. Fuel demand fell to 15.67 million tonnes in July, 11.7 per cent lower compared with 17.75 million tonnes consumption in the same month a year ago, and 3.5 per cent lower than the June sale of 16.24 million tonnes.

Consumption of diesel, which accounts for about two-fifths of India’s overall fuel usage and is the most used fuel for transportation and irrigation, fell 19.25 per cent to 5.52 million tonnes in July from a year earlier, data released by the Petroleum Planning and Analysis Cell (PPAC) of the Oil Ministry showed.

Diesel usage in July was lower than 6.3 million tonnes of consumption in June. Petrol demand fell 10.3 per cent from a year earlier to 2.26 million tonnes, and by 0.8 per cent from 2.28 million tonnes in June. On Tuesday, government data showed a slump in factory output easing in June to 16.6 per cent from 30 per cent contraction seen in May and over 50 per cent fall in April.

Related News: India’s fuel demand up 11% in June as economic activity sees spurt

Naphtha demand fell 12.3 per cent to 1.28 million tonnes in July from a year earlier, but rose 10 per cent from June. Sale of bitumen, used for making roads, slipped 4.4 per cent on an annual basis to 3,89,000 tonnes, and by about 45 per cent month-on-month.

Cooking gas LPG is the only fuel that has seen rise post-outbreak of the COVID-19 pandemic, mostly because the government doled out free cylinders to poor to minimise hardships caused by the pandemic. LPG sales rose 2.3 per cent in July to 2.27 million tonnes.

(With inputs from agencies)