India's fuel demand dips 11.7% in July1 min read . Updated: 12 Aug 2020, 09:22 PM IST
Fuel consumption, a reflection of economic activity in the country, had dropped by over 45% in April after the nation went under a covid-19 induced lockdown late March, stalling industrial activity and vehicular movement
After showing signs of recovery in the past month, India’s fuel demand dipped 11.7% in July, according to data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas.
Fuel consumption, a reflection of economic activity in the country, had dropped by over 45% in April after the nation went under a covid-19 induced lockdown late March, stalling industrial activity and vehicular movement.
However, with easing of lockdown through the months of May and June, the fuel demand had picked up.
However, with covid-19 cases spiking across the country and various states imposing mini-lockdowns to curb the same, fuel demand fell 3.5% in July over the previous month.
In volume terms, fuel demand fell to 15.67 million tonnes in July, 11.7% lower compared with 17.75 million tonnes consumption in the same month a year ago, and 3.5% lower than the June sale of 16.24 million tonnes.
Diesel, which accounts for around two-fifth of India’s overall fuel consumption fell 19.25% to 5.52 million tonnes in July from a year ago period.
Petrol demand fell 10.3% from a year ago to 2.26 million tonnes, and by 0.8% from 2.28 million tonnes in June.
On Tuesday, India’s factory output contracted sharply for the fourth straight month in June, though at a slower pace than in May. Data released by the National Statistical Office showed the index of industrial production (IIP) contracted 16.6% in June against 34% contraction in May. During the June quarter IIP contracted 35.3%, which may heavily weigh on GDP growth for that quarter, data for which is scheduled to be released by end August.
In June, manufacturing (17.1%) activity improved the sharpest with contraction in output coming down to 17.1% from 38.4% in May while contraction in mining (19.8%) and electricity (10%) sectors recovered only marginally.
Cooking gas or LPG sales rose 2.3% in July to 2.27 million tonnes. LPG has seen a surge in demand post the outbreak of the covid-19 pandemic as India stayed home and the government decided to give free cylinders to poor to minimise pandemic induced hardships.
Naphtha saw its demand fall 12.3% to 1.28 million tonnes in July from a year earlier, but rose 10% from June. Sale of bitumen, used for making roads, slipped 4.4% on an annual basis to 3,89,000 tonnes, and by about 45% month-on-month.