NEW DELHI: Data on fuel demand for August shows clear indications that renewed lockdowns across several states resulted in a sharp decline in consumption. While demand for petrol and diesel is yet to recover to pre-Covid levels after the precipitous fall recorded in April, on a month-on-month basis, demand had showed a positive trend after the government began easing restrictions in May.
However, data from the Union Petroleum Ministry’s Petroleum Planning and Analysis Cell (PPAC) released on Thursday shows that beginning July, demand for the freight transport fuel-of-choice— diesel— has continued to trend downward. Diesel consumption, which had crashed to 3.2 million tonnes (MMT) in April, had risen to 6.3 MMT in June. But July and August have recorded sales of only 5.5 MMT and 4.8 MMT respectively.
The demand trajectory is marginally better for petrol. From a record low of 0.97 MMT in April, consumption rose to 2.28 MMT in June. However, unlike diesel, while July saw a dip back to 2.26 MMT, demand rose in August to 2.3 MMT. Petrol may have dared better than diesel, but consumption of both fuels remain significantly lower than pre-Covid levels.
On a year-on-year basis, total petroleum product sales in August stood 16 per cent lower than during the same month last year. According to a senior oil marketing company official, a large part of lower diesel
demand has also been the high cost of fuel. Several truck owners associations have protested the large hike in excise duties and VAT imposed on both fuels during the summer. “Lockdowns are rising again and high fuel cost has also played a part. The upcoming festival season may begin boosting demand due to companies stocking up on inventory,” the official added.