CHENNAI: Consecutive national lockdowns and large scale disruption in transport and logistical activity saw India’s fuel consumption contract in FY21 for the first time in over two decades, data from the petroleum ministry’s Petroleum Planning and Analysis Cell (PPAC) showed on Friday.
Fuel demand contracted by a sharp 9.1 per cent during the fiscal year pan-India, with 194.63 million tonnes of petroleum products being consumed compared to 214.12 million tonnes the previous fiscal (FY20). This contraction is the first since 1998-99 the earliest year for which petroleum consumption data is published.
The dive was led by diesel, unsuprisingly, being the fuel of choice for most industrial and commercial transport in India. Diesel consumption fell 12 per cent to 72.72 million tonnes during the year, while petrol demand shrank 6.7 per cent to 27.95 million tonnes. Domestic cooking gas, or LPG, was the only fuel category that saw an increase during the fiscal, consumption rising by 4.7 per cent to 27.59 million tonnes from 26.33 million tonnes in 2019-20. Analysts note that this was largely driven by the government’s policy of offering free cylinders to the poor as relief during the pandemic.
With airlines remaining shut for the’most years and yet to resume full-scale operations, jet fuel (ATF) consumption recorded a fall of 53.6 per cent to 3.7 million tonnes. Naphtha sales were almost flat at 14.2 million tonnes, but bitumen (used in road construction) rose 6 per cent to 7.11 million tonnes as the government stepped up construction activity to reflate the economy.
Fuel consumption had halved in April last year following the imposition of the lockdown late in March 2020, but started to recover once the lockdowns began being eased in May and June. Petrol sales had returned to pre-Covid levels in September last year, and the subsequent festive season helped boost economic activity and hence diesel demand. In March 2021, fuel demand had recovered enough to post a 18 per cent year-on-year growth to 18.77 million tonnes with diesel consumption rising 27 per cent and petrol 25.7 per cent.