Fuel prices continued to pinch the pockets of the common man for the 17th consecutive day on Tuesday, with the price difference between petrol and diesel narrowing down to a mere 36 paise. Though oil marketing companies (OMC) increased prices, they are seeing a demand recovery for petrol and diesel in June at 85 per cent of what it was in the same month last year.

On Tuesday, the price of petrol in Delhi was seen at Rs 79.76 while diesel was at Rs 79.40 a litre, cheaper by only 36 paise. In the last 17 days, petrol price has increased by Rs 8.5 a litre and that of diesel by Rs 9.77 a litre. This was after a period of 83 days when there was no price revision by the OMCs during the lockdown. The prices of petrol in Mumbai was Rs 86.54 a litre while diesel stood at Rs 77.76 a litre.

The result of this hike was seen in the marketing margin of the companies. “By the end of last week, gross marketing margin at 15-day average prices was Rs 2.9 a litre in diesel and Rs 3.7 a litre in petrol – versus a historical average of Rs 2.5 a litre on these fuels,” said a Mumbai-based analyst.

However, the consumption seems to have come out of the lull witnessed in April and May. “We were 40 per cent of normal demand in the month of April. By mid-May, it came to around 70 per cent. Now, fuel demand is around 85 per cent of a normal June month. In gasoline it is slightly on the higher side at around 90 per cent of a normal June month,” said R Ramachandran, director, refineries at Bharat Petroleum (BPCL).

Consumption of petroleum products during May 2020 was 14.6 million tonne (MT) as against 19.1 MT in May last year. May 2020 registered an overall fall of -23.3 per cent compared to May 2019 mainly due to few restrictions that still remained in the lockdown, said a report by the Petroleum Planning and Analysis Cell (PPAC).

Despite an increase in mobility and economic activities, petrol consumption fell 35.4 per cent in May 2020 with sales of 1.8 million tonne as compared to 2.7 mt during the same month in 2019. On the other hand, diesel sales dipped 29.4 per cent, with sales of 5.5 MT in May as compared to 7.8 MT in May 2019. As the mobility improved in the month of May as compared to the previous month, consumption in May 2020 rose by 69.1 per cent as compared to the previous month, the report said.

Interestingly, breaking the trend, May saw growth in consumption of LPG by 12.8 per cent, Naphtha by 36.3 per cent and Light Diesel Oil (LDO) by 40.5 per cent. The rise in LPG consumption was due to free cylinders distributed by the government, while growth in petrochemical exports led to higher consumption of naphtha in that sector and higher consumption from the power sector boosted LDO sales.

Aviation turbine fuel (ATF) consumption fell 83.6 per cent in May as both domestic and international air travel remained banned except for certain flights engaged in special services. “In June, it was seen at 30 per cent of what it was in June last year. Probably, the world has seen the peak of ATF,” Ramachandran said.