While rural agricultural demand is mainly driving diesel consumption, floods in Bihar and northeastern states has moderated the speed of demand recovery. Muted sales of commercial vehicles is also not letting diesel sales rise.
Diesel sales itself contribute to around 40% of the total consumption of petroleum products in the country.Consumption of diesel in August was 12% lower than the levels recorded in in July, signalling that the re-imposition of lockdown curbs in many areas has slowed industrial and commercial consumption.
On a year-on-year basis, diesel consumption was down 20.7% to 4.9 MT in August. Diesel sales itself contribute to around 40% of the total consumption of petroleum products in the country.
While rural agricultural demand is mainly driving diesel consumption, floods in Bihar and northeastern states has moderated the speed of demand recovery. Muted sales of commercial vehicles is also not letting diesel sales rise.
According to provisional data by the government’s petroleum planning and analysis cell (PPAC), petrol sales were down 7.5% annually in August, but the consumption volumes were 5.4% higher than the preceding month. Demand for the aviation turbine fuel (ATF) fell 61.6% annually in this period, but recorded a 9.9% rise from July levels with the gradual opening of the domestic aviation sector.
Sales of liquefied petroleum gas (LPG) was the only major product to register growth in the lockdown period due to government scheme of free cylinder refills for poor households. However, LPG sales dipped 5.3% year-on-year in August.
Consumption of bitumen, mostly used in road construction, increased 36.8% annually in the month, mainly on a lower base of abnormally low sales in August, 2019.
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% year-on-year to 213.7 MT.
Similarly, power consumption in the country fell 1.6% year-on-year to 109.7 billion units in August and industrial and commercial activities remained muted in the aftermath of the nationwide lockdown imposed to contain the coronavirus outbreak.
Electricity consumption in the month was even 2.2% lower than July, with the advent of the monsoon reducing domestic home-cooling demand.
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