After petrol, diesel demand has returned to pre-COVID-19 levels as sales rose 8.8 percent in the first half of October from a year ago, preliminary industry data showed. This is the first annual increase in sales of diesel – the most consumed fuel in the country – since the nation imposed lockdown in late March to curb the spread of the pandemic.
While demand for petrol has been more resilient than diesel due to an increased preference for using personal vehicles instead of public transport to follow distancing norms, October 1-15 sales number showed better than anticipated recovery. Pent-up demand and the upcoming festive season was expected to support fuel sales but even before that diesel sales rose to 2.65 million tonnes in the first fortnight of October from 2.43 million tonne a year back and 2.13 million tonne in the first half of September.
Petrol, which had returned to pre-COVID levels last month, posted a 1.5 percent rise in sales to 982,000 tonne in the first half of October, up from 967,000 tonne in the same period a year back and 968,000 tonne in the first fortnight of September. India witnessed unprecedented demand destruction after a nationwide lockdown was imposed on March 25. Oil demand fell by as much as 49 percent in April.
With the easing of restrictions and reopening of the economy, fuel demand recovered sharply in June from April before slowing due to the reimposition of restrictions in certain cities because of coronavirus and flooding in some regions. It started to climb back again in September. Even in September, diesel had shown a month-on-month increase.
On Thursday, Shrikant Madhav Vaidya, Chairman of Indian Oil Corp – the nation’s biggest oil firm, had stated that September recovery was faster than expected. But aviation turbine fuel (ATF) sales continue to be way below normal as airlines are yet to resume full services.
ATF sales fell 57 percent to 135,000 tonne in the first half of October from a year ago but was 2.5 percent higher than 130,000 tonne sold in the first fortnight of September. ”We see (oil) demand picking up this quarter (October-December) and by the end of the current financial year (March 2021), we should be back to pre-COVID levels,” Vaidya had said.
Petrol sales had climbed rapidly because personal mobility was being preferred leading to more private cars on the road. But in the case of diesel, consumption sectors like school buses and public transport were at a very subdued level. Industry sources said while the Indian economy has started to pick up with lockdown restrictions being lifted since June, local lockdowns by states have hampered the demand quickly picking up.
Cooking gas LPG sales at 1.16 million tonne during October 1-15 were up 7 percent year-on-year and 3 percent month-on-month. Car sales rose 26.4 percent in September from a year earlier, while two-wheeler sales increased by 11.6 percent.