Petrol demand rises in July, rains continue to cut into diesel sales

New Delhi, Aug 1 (PTI) India’s petrol consumption rose in July, but diesel demand fell owing to monsoon rains and floods in some parts of the country, preliminary industry data showed on Tuesday.

Consumption of diesel, the most consumed fuel in the country accounting for about two-fifths of the demand, fell 4.3 per cent to 6.15 million tonne in July compared to the year-ago period.

Consumption had fallen by a steep 15 per cent in first half of July but picked up in the second fortnight.

Diesel sales typically fall in monsoon months as rains lower demand in the agriculture sector which uses the fuel for irrigation, harvesting and transportation. Also, rains slow vehicular movements.

Consumption of diesel had soared 6.7 per cent and 9.3 per cent in April and May, respectively as agriculture demand picked up and cars yanked up air-conditioning to beat the summer heat. It started to taper in the second half of June after the monsoon set in.

Month-on-month sales fell 13.7 per cent, when compared with 7.13 million tonne of diesel consumed in June.

Petrol sales however rose 3.8 per cent to 2.76 million tonne in July when compared with the same period last year. Consumption had dropped 10.5 per cent in the first fortnight of July but picked up in the latter half. Sales were down 4.6 per cent month-on-month, the data showed.

Both the manufacturing and services sectors in India have been in expansion territory to support oil demand for over one year.

This led to petrol and diesel sales rising since the second half of March.

For the year, India’s oil demand is forecast at 0.2 million barrels per day year-on-year, according to oil cartel OPEC’s monthly oil bulletin.

Consumption of petrol during July was 16.6 per cent more than in COVID-marred July 2021 and 20.8 per cent more than in pre-pandemic July 2019.

Diesel consumption was up 12.8 per cent over July 2021 but almost flat when compared with July 2019.

With the continuing rise in passenger traffic at airports, jet fuel (ATF) demand rose 10.3 per cent to 603,500 tonne during July as compared to the same period last year.

It was more than double that of July 2021, but 2.9 per cent lower than pre-COVID July 2019.

Month-on-month jet fuel sales was up 1.6 per cent when compared with 594,100 tonne in June 2023.

The country’s oil demand during the last few months was supported by strong industrial activity, industry officials said.

Cooking gas LPG sales were down 1.7 per cent year-on-year to 2.46 million tonne in July. LPG consumption was 4 per cent higher than in July 2021 and 11.7 per cent more than pre-COVID July 2019.

Month-on-month, LPG demand was up 8 per cent compared to 2.28 million tonne of LPG consumption during June, the data showed.