The Hindu Business Line : Marginal rise in diesel sales

AFTER several months, there has been an improvement in sales of diesel, albeit marginal, indicating a revival in the economy. However, the growth in sales is still negative.

Diesel sales, which account for about 40 per cent of the country's petroleum products consumption, showed a year-on-year negative growth of 2.2 per cent in March 2002. Last month, diesel consumption stood at -7.9 per cent.

Overall cumulative growth rate for petroleum products consumption stood at one per cent for the period April 2001 to March 2002.

"We had expected the overall cumulative growth rate to be at negative 2-3 per cent. This is a positive sign," said a senior industry analyst.

Petrol consumption growth rates stood at 6.69 per cent in March 2002 while kerosene was at -8.8 per cent. Kerosene sales continued to fall, with consumption trends shifting to LPG and continual clampdown on adulteration, say industry officials.

"Improvement in sales of diesel and petrol on a month-on-month basis could be because prices of both products were reduced last month," said an analyst.

Consumption of liquefied petroleum gas (LPG) was at 0.6 per cent, after the increase in prices effected last month.

The product sales of feedstocks such as naphtha and low sulphur heavy stock fell substantially with the growth rate at -8.6 per cent and -13.3 per cent. Furnace oil recorded a positive growth rate of 2.3 per cent.

"Gujarat is a large consumer of naphtha and LSHS. Last month's riots could have affected the consumption of these products," the analyst said.

According to State-wise industry figures, in 1999-2000, Gujarat accounted for about 11 per cent of the country's petroleum products consumption.

Lubricants, however, showed a sudden jump in consumption at 8.3 per cent. Last month, public sector lubes sales stood at -24.2 per cent.

According to senior officials of private sector lubricants manufacturers, the jump is the result of companies offloading huge amount of products at low prices to meet annual sales targets.

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