The monthly consumption of petrol and diesel by the world’s third biggest consumer hit an all-time high during March 2022, even as retail prices of the two key commodities shot up to their highest levels for that month.

The country’s domestic consumption growth was aided by economic activity inching back to normalcy as well as common man and industries stocking on the key commodities in anticipation of the government resuming the fuel price mechanism post assembly elections in five States. Fuel price revision resumed from March 22.

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According to the data from the Petroleum Planning and Analysis Cell (PPAC), the country’s demand for high speed diesel (HSD) stood at 7.71 million tonnes during March this year, which is the second highest consumption by the country, barring May 2019 (7.79 mt). Petrol consumption stood at 2.91 mt, which is the highest ever for the key fuel.

Consumption up despite high prices

Analysing the retail selling prices (RSP) of petrol and diesel reveals that prices during March 2022 were the highest ever for the month of March. During March this year, petrol prices were in the range of ₹95.41-101.81 per litre, while diesel prices were hovering at ₹86.67-93.07 a litre.

For comparison sake, the RSP range for petrol and diesel stood at ₹90.56-91.17 a litre and ₹80.87-81.74 per litre, respectively in March 2021. Similarly during March 2020, the RSP range was ₹69.59-71.71 a litre and ₹62.29-64.30 a litre for petrol and diesel, respectively. Likewise in March 2019, the prices were in the range of ₹71.81-72.86 a litre and ₹66.14-67.12 a litre for petrol and diesel, respectively.

During March 2022, Brent crude oil prices scaled $139.13 per barrel, before easing, which is the highest since 2008. Back home, the crude oil (Indian Basket) FOB price stood at $126.36 per barrel at an exchange rate of ₹76.92 per US dollar on March 7. For comparison’s sake, on April 7, the crude oil price on FOB basis was $98.68 a barrel at an exchange rate of Rs 75.78 for the US dollar.

For March 2022, the average crude oil price stood at $112.87 a barrel on FOB (free on board) basis. Petrol prices averaged at $127.44 a barrel, while diesel stood at $138.12 per barrel.

Moody’s Investor Service in a March 24 report said that transportation fuel prices in India have largely remained unchanged since November 4, 2021 despite crude oil prices averaging around $111 per barrel in the first three weeks of March 2022 compared to around $82 in early November.