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India

Fuel Consumption Back at Pre-Covid Levels After Demands Rises in July

Fuel demand had recovered to pre-Covid levels in March 2021 but a brutal second wave of the pandemic ensured that economic activities were again reduced.

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Image used for Representational Purpose only. (Photo: Pixabay)

New Delhi: Fuel sales in India in the month of July touched pre-Covid levels as the easing of lockdown norms and increase in economic demand helped bolster its demand in the country. 2.37 million tonnes of petrol was sold by state-owned retailers in the month of July 17 per cent from the year early.

The sale was 3.56 per cent higher than in July 2019 when2.39 million tonnes of petrol was sold.

Meanwhile, the sale of diesel rose by 12.36 per cent to 5.45 million tonnes but compared to July 2019 the demand is less than 10.9 per cent.

This is the second consecutive month when the demand for fuel has increased in the market.

Fuel demand had recovered to pre-Covid levels in March 2021 but a brutal second wave of the pandemic ensured that economic activities were again reduced.

The data says that the sale of diesel should reach pre-Covid levels by Diwali but only if the third wave of a pandemic does not strike.

Fuel demand showed signs of resurgence in June after restrictions began to be eased and the economy gathered pace.

On July 30, S M Vaidya, Chairman of India’s largest oil firm IOC, had stated that petrol consumption has risen over pre-Covid levels as people prefer personal transport over public transport. Diesel sales, he said, were likely to return to pre-pandemic levels by Diwali in November if a third wave of Covid infections does not lead to reimposition of lockdown.

ATF consumption, which had seen the most severe fall as air travel was restricted beginning March 2020, is likely to return to normal by the end of the current fiscal in March, he had said.

Consumption of LPG, the only fuel which showed growth even during the first lockdown because of free supplies by the government to the poor, rose 4.05% year on year to 2.36 million tonnes in July. It was up 7.55% over July 2019.

With airlines yet to resume full-scale operations because of travel restrictions around the globe, jet fuel sales at 2,91,100 tonnes was up 29.5% year on year but 53.1% lower than July of 2019. India’s oil demand had dropped by 0.5 million barrels per day in 2020, led by a steep weakening in transportation fuel, mainly in April-June 2020.

Extended lockdown measures, coupled with limitations on mobility, diminished oil product requirements.

Petrol and jet fuel recorded historical declines compared with the same period in 2019. Diesel was down, in line with weakness in industrial activity, as well as in road construction and agriculture.

With inputs from PTI