Fuel consumption rose 11% to 16.28 million tonnes in June over demand witnessed in the previous month. The demand was, however, 7.8% lower than 17.67 million tonnes consumption in June 2019
NEW DELHI : India's fuel demand in June continued its recovery from a 13-year low hit in April as more commuters preferred private vehicles over public transport for fear of contracting COVID-19 and economic activity gradually picked up on easing of lockdown restrictions.
Petroleum product consumption rose 11% to 16.28 million tonnes in June over demand witnessed in the previous month, according to data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum and Natural Gas.
The demand was, however, 7.8% lower than 17.67 million tonnes consumption in June 2019.
Fuel demand had plunged to 9.93 million tonnes in April, its lowest level since 2007 after stringent coronavirus lockdown halted economic activity and took most vehicles off-road.
Overall, fuel demand had reached over 92% of pre-COVID levels.
Demand for diesel, the most consumed fuel in the country, reached 84.5% of normal levels, while petrol consumption was at 86.4% of normal levels.
Diesel consumption stood at 6.3 million tonnes in June, 14.5% higher than May, but 15.4% lower than the demand witnessed in June 2019.
Demand for diesel in June was almost double of 3.25 million tonnes consumption in April.
Petrol sales at 2.28 million tonnes were almost 29% higher than May, but 13.5% lower than June 2019. It more than doubled from 9,73,000 tonnes in April, the data showed.
Officials said petrol and diesel demand has rapidly climbed due to higher use of private vehicles as commuters avoided public transport.
Cooking gas LPG sales continued to rise on the back of free refills offered by the government to deal with COVID distress. LPG sales were up 15.7% at 2.07 million tonnes.
With very few flights in the air, aviation turbine fuel (ATF) demand fell 65.8 % year-on-year to 2,22,000 tonnes.
The demand for industrial fuels continued to rise with gradual resumption of economic activity. Naphtha sales were up 18.2% year-on-year at 1.16 million tonnes, while fuel oil consumption rose 6.3% at 6,99,000 tonnes.
Sale of bitumen, used for road construction, was up 27.5% to 5,06,000 tonnes and petroleum coke usage was up 7.8% at 1.6 million tonnes.
"India's oil demand for June'20 only slipped 7.8% year-on-year (YoY) due to gradual easing of the COVID-19 led lockdown versus the steep 23.1% contraction seen in May and 45.8% YoY contraction in April 2020," JM Financial said in its comments.
It said first-quarter 2020-21 oil demand came in 26% lower YoY.
"Our calculation suggests that domestic oil demand for FY21 might contract about 10% given the sharp 26% hit to 1QFY21 demand and assuming that demand begins to normalise gradually over the next couple of months," it said.
The steep decline in domestic oil demand comes amid the backdrop of moderation in oil demand growth seen since 2QFY19.
India's FY20 oil demand growth was subdued at 0.2 per cent YoY versus 3.4% growth witnessed in FY19 and 4.5% CAGR reported over the past decade.
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