India's fuel demand growth hits 23-month high in November

Updated : December 12, 2019 07:37 AM IST

Diesel consumption, which accounts for about two-fifths of India's overall refined fuel demand, reversed the declining trend of the previous three months and rose by 8.8 percent to 7.55 million tonnes in November from a year earlier.

Although fuel consumption normally reflects industrial activity in India, industry officials linked the annual increase in November to a low base last year, when sales of the fuel plunged during the month due to the late falling of festivals.

Sales of bitumen, used for making roads, were 12 percent higher, while fuel oil use dipped 2 percent in November, the data showed.

India's fuel demand grew by 10.5 percent in November from a year earlier, its fastest pace since January 2018, driven by higher consumption of transport fuels gasoil and gasoline, and cooking gas.

Consumption of refined fuels, a proxy for oil demand in Asia's third largest economy, totalled 18.77 million tonnes in the month, preliminary data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed on Wednesday.

"During festival season road and other infrastructure related construction work temporarily comes to a halt, and also movement of transportation vehicles - mainly trucks - get restricted," an official at one of the state refiners told Reuters.

"Last year festival season was in November when diesel sales growth was negative while this year festivals were in October, so we are seeing high growth in November," he added.

For most of this fiscal year beginning April, India's diesel sales have remained subdued due to various factors including a prolonged monsoon season and softening industrial activity. Analysts expect the trend to continue until the second half of 2020.

Between April and November, diesel consumption grew by about 1% from the same period a year ago, the data showed. For an explainer on India's slowing diesel demand double click

Sales of gasoline, or petrol, rose 9 percent from a year earlier to 2.53 million tonnes. Cooking gas or liquefied petroleum gas (LPG) sales increased 23.4 percent to 2.27 million tonnes and sales of naphtha rose 2.5 percent to 1.25 million tonnes in November.

Sales of bitumen, used for making roads, were 12 percent higher, while fuel oil use dipped 2 percent in November, the data showed.

Published : December 12, 2019 07:37 AM IST

India's fuel demand growth hits 23-month high in November

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