India has cancelled orders for multiple cargoes of liquefied petroleum gas (LPG) only weeks after going on a buying spree as the nation went into lockdown, highlighting the difficulty of assessing fuel demand in a pandemic.

The nation’s three biggest state-owned refiners have negotiated the cancellation of at least five cargoes of the fuel due to arrive in May and June with term suppliers in the West Asia, according to traders and company officials. The processors were left with too much LPG after over-estimating demand and ramping up purchases in late March and early April.

Consumption of transport and industrial fuels plunged after India imposed the worlds biggest national lockdown on March 25, but LPG was resilient as its mainly used for cooking at home. Demand for the gas, the only processed fuel that India imports large quantities of, was estimated to have jumped 40 per cent in the first week of April as people rushed to stock up. The buying tempo wasn’t sustained, however, with consumption increasing only 12 per cent over the full month.

The Indian refiners predicament shows how difficult it is to assess demand in the midst of a fast-evolving pandemic. The country’s initial three-week stay-home order has already been extended twice but has also been relaxed with factories, offices and transportation restarting gradually. The Government’s announcement in late March that it would supply LPG free to 83 million poor households may also have skewed the refiners buying decisions.

“Panic buying in India last month somewhat boosted demand and thus imports of LPG. Despite India extending the lockdown until May 17, its not going to boost LPG demand as Indians have already covered their needs for May and June,” said Jeslyn Chua, an analyst at industry consultant FGE.

The five LPG shipments of around 45,000 tons each bought by Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp have been cancelled through mutual agreements with the suppliers, according to the traders and officials who did not want to be named due to internal company policy. The Indian companies typically import 25-30 cargoes a month through long-term contracts with producers including Saudi Arabia, Qatar, Oman and Kuwait.

The refiners went on a buying spree just after the lockdown was announced, with Indian Oil Minister Dharmendra Pradhan even asking the Saudis to ensure there was enough supply for India as local processors implemented production cuts. They issued tenders to buy at least 737,000 tons of LPG for delivery in April, May and June, normally the leanest months for consumption of the gas, but ended up purchasing just over half that amount as prices skyrocketed.

India is likely to refrain from LPG buying on the spot market for the next few months, FGEs Chua said. The refiners will probably only return in September after they draw down stockpiles to prepare for an increase in demand ahead of the Deepavali festival, she said.

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