Softening manufacturing activity and reduced mobility during January 2023 pulled down the demand for auto fuels and LPG, while consumption of key industrial inputs such as bitumen and lubricants remained almost flat.
According to the Petroleum Planning and Analysis Cell (PPAC), diesel consumption declined 8 per cent m-o-m to 7.2 million tonnes last month, while petrol consumption fell 7 per cent to 2.8 mt. The consumption of liquefied petroleum gas (LPG) went south by 4 per cent on a monthly basis to 2.5 mt.
While, the consumption of bitumen, a key input in the roads sector, and lubricants and greases stood almost flat at 0.66 mt and 0.42 mt, respectively. The consumption of Aviation Turbine Fuel (ATF) rose marginally by a little over 1 per cent m-o-m to 0.67 mt in January 2023.
On a cumulative basis as well, petroleum product consumption slipped 5 per cent m-o-m to 18.70 mt in January. However, it was the third highest, after December 2022 (19.60 mt) and November 2022 (18.84 mt), in the first ten months of the current fiscal year ending March 2023.
A senior official with an oil marketing company (OMC) explained that mobility was higher during November and December due to rabi sowing season, marriage and tourism activity. Besides, FMCG movement was also high. Subsequently,, demand for petroleum products fell in January as these activities subsided, coupled with cold wave conditions and fog impacting vehicular movement.
Construction activity was also slightly impacted due to weather and certain other factors, which had a bearing on demand for bitumen and lubricants, particularly from the logistics sector. ATF consumption is in line with peak air travel season (December and January), but it is expected to subside in the next two months, he added.
Industrial activity moderates
The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) fell to a three-month low of 55.4 in January from 57.8 in December 2022. Both output and new orders grew at a softer pace with foreign sales increasing the least in FY23 so far, while input buying also eased despite growth remaining strong.
Furthermore, CareEdge in a report said that services sector activity lost momentum in January as PMI services eased owing to the fall in exports and new orders. Merchandise exports witnessed broad based contraction in January due to weakened external demand.
Imports also recorded a 17-month low partly reflecting softening commodity prices of key imported goods. The e-way bill generation came off the peak seen in December but remained above 80 million for the third consecutive month, it added.