Fuel Demand Soars in State as Vehicles Vroom Past 1-cr Mark

Published: 26th January 2015 06:00 AM  |   Last Updated: 26th January 2015 03:33 AM   |  A+A-

KOCHI: The state is witnessing an unprecedented increase in the demand for petrol and diesel owing to the upsurge of the middle class. Every hour, petrol and diesel worth around Rs 2, crore is sold in Kerala. With around 1 crore vehicles plying the roads in the state and over 3,500 new vehicles hitting the road every day, Kerala is a growing market for petrol and diesel.

Posting an annual sales growth of 6-14 per cent, fuels worth around Rs 38 crore are sold in the domestic market on a daily basis. Also, the state exchequer makes a daily taxable income of Rs 13-15 crore from the sales of these fuels.

fule.JPGThough Kerala accounts for a mere 3.8 per cent of the national consumption of petroleum products, riding on the growing domestic demand, the market is poised to be steady and growing.

It is estimated that around 40 lakh litres of petrol and 80 lakh litres of diesel are sold through 3,100 retail selling points in the state daily. Going by the present rate, around Rs 15 crore worth of petrol and Rs 23 crore worth diesel are being sold in a day in the state.

“The growth in the sale of petrol and diesel in Kerala is not directly proportional to the increasing number of vehicles. Generally, the consumption of petrol and diesel in the state grows at a moderate rate of 6-14 per cent annually.

“On an average, 1,800 litres of petrol and 2,200 litres of diesel are sold from a single retail outlet each day. The rule of thump in the sector is that for every one litre of petrol sold in Kerala, two litres of diesel will be sold. For the past few years, the sales had been registering an upward trend,” said R Sabarinath, joint secretary, Federation of All-India Petroleum Traders.

He pointed out that when mega infrastructure projects like Kochi Metro happens, the sales of Diesel shoots up by at least 20 per cent. According to him, integration of three public sector oil companies - IOC, BPCL and HPCL - will bring in more vibrancy in the sector as retail outlets are not evenly spread in the state.

For every litre of petrol sold in Kerala, the state government gets Rs 13.374 as sales tax and cess, and in the case of diesel it is Rs 9.968.

Though the sales of petrol and diesel had registered a growth rate of 15 per cent during the 2006-07 period, it has fallen to 6-14 per cent now.

Though the total number of houses in the state is around 85 lakh, the number of vechicles registered is 95 lakh. This, along with other vehicles, make Kerala a 1 crore vehicle market, which translates the state into a fertile ground for petrol and diesel sales.

“Every single day, 3,500 new vehicles are being registered in Kerala. Taking into consideration the geographical area, the state has more number of vehicles in the country, excluding metropolitan cities. Of the total vehicles, 70 per cent are two-wheelers. For every three person, there is vehicle in the state,” said Vinod Kumar N, motor vehicle inspector, RTO (enforcement) Ernakulam.

India’s annual consumption of diesel is 6.84 million tonnes and petrol consumption stands at 17.1 million tonnes.

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