After months of lull, India’s fuel demand rebounds in June

• Shubham
• 11 July, 2021

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By: Shubham Ghosh

AFTER slumping to a nine-month low, India’s fuel demand rebounded in June as restrictions to curb the spread of the coronavirus pandemic were eased, boosting economic activity and mobility.

Data from the Petroleum Planning and Analysis Cell (PPAC) of the Indian ministry of petroleum and natural gas showed that fuel consumption went up 1.5 per cent to 16.33 million tonnes in June from a year earlier and by eight per cent over May this year.

The sale of petrol increased 5.6 per cent year-on-year to 2.4 million tonnes in June. It was up 21 per cent from May sales of just below two million tonnes.
Diesel, on the other hand, saw a 12 per cent rise in sales from May to 6.2 million tonnes but was down 1.5 per cent from June last year and almost 19 per cent from June the year before.

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This is the first monthly increase registered since March.

In March, the demand for fuel had recovered to near-normal levels before the devastating second wave of the pandemic hit India which saw re-imposition of lockdowns in a number of states, disrupting mobility and economic activity. Consumption in May, when the second wave hit the peak, became the lowest since August 2020.

Former Indian oil minister Dharmendra Pradhan said in June that India’s fuel demand would return to the pre-pandemic levels by the end of 2021. “We are confident by the end of this calendar year we will be in a position to restore our original (pre-COVID) consumption behaviour,” Pradhan, whose portfolio was changed in the recent mega reshuffle in the Narendra Modi government, said.

Consumption of LPG or liquified petroleum gas, the only fuel which showed growth even during the first lockdown owing to free supplies by the government to the poor, went up by 9.7 per cent year on year to 2.26 million tonnes. It was up 26.3 per cent over June 2019.

Jet fuel sales were at 258,000 tonnes and up 16.2 per cent year on year but 61.7 per cent lower than that in June 2019. Airlines are yet to restart full operations because of travel restrictions.