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India's fuel demand reaches 80-85% of pre-COVID levels

"When compared with June 2019, petroleum product demand during the first fortnight of June rose to 80-85 per cent of pre-Covid levels," Dharmendra Pradhan said at a webinar.

Petrol
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Published : Jun 16, 2020, 3:36 PM IST

New Delhi: India's fuel demand has reached 80-85 per cent of pre-Covid levels in the first half of June but return to 5 per cent growth trajectory may take up to two years, Oil Minister Dharmendra Pradhan and industry leaders said on Tuesday.

Fuel sales in the world's third biggest oil consuming nation had fallen to their lowest in 2007 as the government imposed a nationwide lockdown to prevent the spread of coronavirus.

The demand, which had fallen by as much as 70 per cent, has since recovered after lockdown restrictions were eased beginning early May.

"When compared with June 2019, petroleum product demand during the first fortnight of June rose to 80-85 per cent of pre-Covid levels," Pradhan said at a webinar.

Fuel consumption at 14.65 million tonnes in May was 47.4 per cent higher than April but 23.3 per cent lower than a year earlier. Diesel - the most consumed fuel - was down about 29.4 per cent in May while petrol sales fell 35.3 per cent.

During June 1 to 15, diesel demand has further recovered. At 2.67 million tonnes, it was 15 per cent lower than a year back, industry data showed.

Petrol sales at 930,000 tonnes were 18 per cent lower than last year.

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ATF, whose sales slumped to almost nil as airlines suspended operations, was 73 per cent lower in the first half of June than a year back. LPG sales were up 7 per cent at 960,000 tonnes.

Speaking at the webinar, Sanjiv Singh, Chairman of Indian Oil Corp (IOC) - the nation's largest fuel retailer, said the return of growth trajectory in fuel demand will take 2 years.

Prior to fuel sales losing momentum in 2019-20 fiscal (April 2019 to March 2020) due to sluggish economic activity, demand had grown at 4-5 per cent.

Fuel demand in 2019-20 was almost flat at 213.7 million tonnes. Fuel demand had grown by 3.4 per cent in 2018-19 to 213.2 million tonnes while it had risen by 5.96 per cent in 2017-18 to 206.2 million tonnes.

Singh comment implied that return to the trajectory of 4-5 per cent growth in fuel demand annually will take up to 2 years.

(PTI Report)

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