India’s petrol and diesel sales in July so far are lower as compared with last month, as seasonal rains reduced demand. It might put a lid on oil prices. This is the first monthly fall in sales in three months, according to a Bloomberg report.
The country’s three biggest retailers — Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) — sold 1.28 million tonnes of gasoline during July 1-15, which was 8 per cent lower compared to the previous month. Diesel sales also declined about 14 per cent month-on-month, according to the report.
The softening of demand will add pressure on the petrol and diesel prices, as crude oil recently fell below $100 a barrel for the first time since early April due to fears of a recession. The fall in demand will also add to a supply glut in the region that’s curtailing the profits from processing gasoline and diesel.
However, according to a PTI report, on a year-on-year basis, diesel demand was however almost 27 per cent higher year-on-year, supported by strong economic growth and a relatively low baseline for the same period in 2021 when a second wave of COVID-19 had impacted the economy. Petrol sales fell 7.8 per cent to 1.27 million tonnes in the first half of July when compared to 1.38 million tonnes consumption in the same period of the previous month.
Meanwhile, the country’s fuel demand in June had rebounded after declining to a nine-month low in the previous month as restrictions to curb the spread of the pandemic were eased, helping economic activity and mobility to pick up.
Fuel consumption rose 1.5 per cent to 16.33 million tonnes in June from a year earlier and by 8 per cent over May 2021, according to data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum and Natural Gas.
Petrol sales in June rose 5.6 per cent year-on-year to 2.4 million tonnes. It was up 21 per cent from May sales of 1.99 million tonnes. Diesel, which is the most-used fuel in the country, jumped 12 per cent from May to 6.2 million tonnes, but was down 1.5 per cent from June 2020 and 18.8 per cent from June 2019.
Apart from petrol and diesel, consumption of LPG also rose 9.7 per cent year on year to 2.26 million tonnes. It was up 26.3 per cent over June 2019. LPG consumption was the only fuel that showed growth even during the first lockdown because of free supplies by the government to the poor.
With airlines yet to resume full-scale operations due to travel restrictions around the globe, jet fuel sales at 2,58,000 tonnes was up 16.2 per cent year on year but 61.7 per cent lower than June of 2019.
Naphtha sales also fell about 3.1 per cent to 1.19 million tonnes while sale of bitumen – used for making roads, were down 32 per cent at 5,09,000 tonnes. Fuel oil consumption rose 1.9 per cent to 5,33,000 tonnes.