Rising prices pull down demand for petrol, diesel

Petrol and diesel prices have increased 26 times in 2021 with the two auto fuels increasing by Rs 7.46 and Rs 7.60 per litre respectively so far this year.

New Delhi:India's fuel consumption fell for the second month in a row in February to its lowest since September as record-high prices hindered demand recovery.

Petroleum product consumption fell 4.9 per cent to 17.21 million tonnes in February as demand for both petrol and diesel fell, according to data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas.

Diesel, the most used fuel in the country, fell 8.5 per cent to 6.55 million tonnes while petrol consumption was down 6.5 per cent to 2.4 million tonnes.

The demand for petrol had been on a recovery path since last May after all-time lows witnessed during the Covid-19 triggered nationwide lockdown in March and April.

As a result, country's petrol consumption reached as high as 2.7 million tonnes in December in comparison to 0.97 million tonne demand in April.

However, the sales started declining this year on the back of rising prices. As per the data, petrol consumption was 2.6 million tonnes in January and it further fell to 2.43 million tonnes in February.

In a similar way, diesel consumption reached 7.18 million tonnes last December before started declining in 2021.

Rise in prices, fall in demand

The petrol and diesel prices have increased 26 times in 2021 with the two auto fuels increasing by Rs 7.46 and Rs 7.60 per litre respectively so far this year.

Accordingly, petrol is priced at Rs 91.17 a litre and diesel Rs 81.47 a litre in the national capital, the reference market, on Thursday.

Notably, petrol has already reached Rs 100 per litre mark in parts of Rajasthan, Maharashtra and Madhya Pradesh and per litre diesel price is fast approaching the three digit figure in major cities.

However, the price revision was put on hold since February 30.

Reports suggest that state-owned fuel companies have not revised prices in the last 13 days ostensibly to contain political fallout for the ruling party in the ensuing assembly elections in four states and one Union Territory.

(With PTI Inputs)