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

The country's fuel demand increases to 16.28 million tonnes in June from 14.66 million tonnes in May

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. Representational image: iStock

India’s fuel demand has seen a trend of recovery with economic activities resuming in the country after several phases of COVID-19 lockdown. The relaxation on travel restrictions has also resulted in a spike in demand for motor spirit (petrol) over the last few weeks.

The demand has come close to pre-COVID levels in almost all categories. The demand for petroleum products (including aviation fuel, petrol, diesel, and bitumen) increased by 11 per cent in June. It rose to 16.28 million tonnes last month from 14.66 million tonnes in May, according to the data provided by the Ministry of Petroleum and Natural Gas.

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A year ago, the demand in June was 17.67 million tonnes. So, this year has witnessed a decline of around 7.8 per cent. However, the overall fuel demand in the country has recovered by around 90 per cent, compared to pre-COVID times. Simply put, the demand in June has almost reached the level in April.

The fuel demand had slumped in April, following one of the biggest lockdowns in the world. The lockdown not only halted transportation, but also most of the economic activities in April and May. So, the demand for petroleum products in April dropped to 9.93 million tonnes, with a decline of around 40 per cent.

Diesel, which the most consumed petroleum product in the country, saw an increase of 14.5 per cent in June as the demand stood at 6.3 million tonnes. The demand was 3.2 and 5.5 million tonnes in April and May respectively.

Also, the Indian Railways continued freight operations even during the lockdown, while cargo movement by road was resumed May. As a result, the demand for diesel recovered in the following months. It almost doubled in June compared to April. Last year, the demand for diesel was 7.4 million metric tonnes.

Similarly, the motor spirit (petrol) category saw a recovery in May and June, after travel restrictions were relaxed. The demand for motor spirit increased two-and-a-half times than in April. Before COVID-19 outbreak in March, the demand for petrol was 21.56 million tonnes. It increased to 22.81 million tonnes in June, says the data.

It is the result of a surge in vehicular movement — both inter-state and intra-state — post lockdown. The resumption in the movement of private vehicles is also a reason for the higher demand, said the owner of a petrol pump in Pune.

Related News: Diesel crosses ₹80-mark in Delhi after 19th consecutive price hike

Even with the resumption of a limited number of flights, the demand for aviation turbine fuel (ATF) saw a recovery. From 0.5 million tonnes in April, it increased to 2.22 million tonnes by the end of June.

Liquid Petroleum Gas (LPG) or domestic gas saw a reverse trend of increase in usage amid lockdown. The demand increased from 21.3 million tonnes in April to 23.14 million tonnes in May. However, the demand came down to 20.76 million tonnes in June.

Even industrial fuels like Naphtha, LSHS, Petroleum Coke, etc., saw a surge in demand as industries resumed their operations as Unlock-1 began. Bitumen, used for road construction, saw thrice the increase in demand. The overall demand for all fuels has almost reached the pre-COVID levels already.

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