India's demand for fuel drags down as coronavirus crises worsen

India’s demand for fuel drags down as coronavirus crises worsen

Business

India’s demand for fuel dragged down in July, recording its fifth year-on-year fall, government data showed a increase in coronavirus cases on Tuesday, and floods in several parts of the world limited economic activity. Refined fuel consumption, a proxy for oil demand, dropped to 15.68 million tons in July, 11.7 per cent lower than a year earlier and 3.5 per cent lower than the previous month, data from the Ministry of Petroleum & Natural Gas’ Petroleum Planning and Analysis Cell (PPAC) shows.

Diesel consumption, which accounts for around two-fifths of India’s overall fuel consumption and is commonly used for transport and irrigation needs, dropped from 6.31 million tons in June last month to 5.52 million tonnes. Demand for diesel dropped by about 19.3 per cent annually.

Petrol sales dropped 10.3% from a year ago to 2.26 million tonnes, down 0.8% from 2.28 million tons in June. When higher retail prices dented demand in the world’s third-biggest oil user, demand for gasoline was also affected, and as virus cases continue to explode. India’s top refiner, Indian Oil Corp, said last month it would continue to operate its refineries below capacity in 2020/21, and that it didn’t see a recovery in demand to pre-COVID levels “in the near future.”

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