Lockdown effect? Auto fuel demand slips in July

The sales had dropped over 60% annually in April in the beginning of the lockdown.

Consumption of auto fuels in July was lower than the levels recorded in June, signaling that the re-imposition of lockdown curbs in many areas has slowed industrial and commercial consumption. Diesel sales of 5.5 million tonne (MT) and petrol demand of 2.3 MT were lower 12.4% and 0.8%, respectively, than the volumes used in the preceding month.

On a year-on-year basis (y-o-y), diesel consumption was down 19.3% and petrol sales were lower by 10.3%. The sales had dropped over 60% annually in April in the beginning of the lockdown.

According to provisional data by the government’s petroleum planning and analysis cell (PPAC), demand for the aviation turbine fuel (ATF) fell 64.6% annually to 233 thousand tonnes in the month. July ATF sales were only 11,000 tonnes more than May, with the opening of the domestic aviation sector.

Sales of liquefied petroleum gas, which was the only product to register growth in the lockdown period due to government scheme of free cylinder refills for poor households, increased only 2.3% annually in July. Consumption of bitumen, mostly used in road construction, increased 4.4% annually. Consumption of petroleum products had moderated even before the lockdown due to extended monsoon and weak industrial activity. Domestic sales of petroleum products in FY20 had inched up 0.2% y-o-y to 213.7 MT.

Domestic natural gas production fell 10.1% y-o-y to 2,435 million metric standard cubic metre (MMSCM) in July. The 2.6 MT of crude oil produced in the country in the month was also 5% lower than the production from a year-ago period. The development coincides with domestic natural gas consumption falling 14.3% y-o-y to 13,536 MMSCM in Q1FY21 with the lockdown to contain the spread of the coronavirus being implemented in the quarter. Domestic production fell 15.5% annually to 6,785 MMSCM while imports dropped 12.5% to 7,003 MMSCM in the three-month period.