India's fuel demand declines in first fortnight of July

18 Jul 2022 , 10:08 AM

According to preliminary industry statistics released on Sunday, India’s demand for gasoline and diesel decreased in the first half of July compared to the same period last year as the start of the monsoon season reduced consumption in some industries and limited mobility.
Diesel, the most popular fuel in the nation, had a decrease in demand of 13.7% from July 1 through 15, falling from 3.67 million tonnes to 3.16 million tonnes.

The country’s demand for diesel is greatly influenced by the arrival and intensity of the monsoon, and generally, consumption is lower in July and August than it is in April and June.

Floods limit movement, and the start of the rainy season also reduces demand from the agricultural industry, which requires fuel for irrigation pumps and haulage.

However, diesel demand increased by approximately 27% year over year, buoyed by robust economic expansion and a low baseline for the same time period in 2021, when the second wave of COVID-19 had an impact on the economy.

During the period of July 1 to July 15, 2020, diesel consumption exceeded the 2.2 million tonnes of demand by 43.6%. The statistics showed
that it was 13.7% higher than pre-COVID July 2019.

When compared to the 1.38 million tonnes consumed in the same period the previous month, gasoline sales fell 7.8% to 1.27 million tonnes in the first half of July. However, the consumption was 23.3 % higher in July 2021 and 46% higher in the first two weeks of July 2020. Compared to July 2018 before COVID, it increased by 27.9%.

A rise in summer travel to colder parts of the country to avoid the heat and vacations during annual breaks at educational institutions increased the demand for auto fuel in June. India’s entire airport passenger traffic (domestic and international) is edging closer to pre-COVID-19 levels as the aviation industry becomes more competitive.

As a result, from July 1 to July 15, the demand for jet fuel (ATF) increased by 77.2% to 247,800 tonnes over the same period last year. It was 12.59% higher than July 2020 but 17.7% lower than July prior to COVID. Sales decreased 6.7% month over month.

India has had a robust economic growth of 7.1%, and since easing epidemic lockdowns, its oil demand has been continuously increasing.
To stop the coronavirus from spreading, the government enforced a statewide lockdown on March 25, 2020. After two months, the total lockdown, which prevented movement and destroyed business, was gradually lifted.

In the first half of July, cooking gas LPG sales increased 14.15% year over year to 1.24 million tonnes. This is true despite a price increase of Rs50 per cylinder. The amount of LPG consumed in July was 16.6% more than in July 2020 and 8.6% more than in July 2019.

According to the report, the demand increased 8.3% month over a month when compared to the 1.15 million tonnes of LPG consumed in the first half of June.