October saw diesel consumption fall by about 3 per cent year-on-year as the price of the fuel remained higher than in the previous year despite a cut of around ₹3 per litre after de-regulation on October 18.
In October 2014, diesel consumption remained at 5.44 million tonnes (mt) against 5.61 mt in the same month last year, according to Petroleum Planning & Analysis Cell.
Till the deregulation, diesel prices remained at around ₹58.97 a litre in Delhi, around ₹6.43 a litre more than the price prevailing in the same month last year. Even after the ₹3.37 a litre cut after the deregulation on October 18, prices remained ₹3.06 higher than last year.
Consumption of diesel during April-October 2014 has also been 13.1 per cent lower than last year at 34.26 million tonnes.
However, on a sequential basis, consumption saw a sharp increase but industry watchers said this was primarily due to the seasonality, with October being a high consumption month. Sequentially, the consumption was 11.2 per cent higher than September’s 4.89 million tonnes.
October has two important festivals — Diwali and Chhat Puja — which resulted in significantly higher diesel consumption due to more freight movement, said an industry analyst.
“The price cut of around ₹3 a litre across the country also had a positive impact on consumption. The cut was the first in four years,” said the analyst.
With global crude oil prices softening to new lows, there is anticipation of a fresh round of fuel price cuts.
Typically, oil marketing companies review prices on the first and 15th of every month.
On November 14, oil marketing companies did not announce any change despite the Centre raising excise duty by ₹1.5 a litre on both petrol and diesel. The hike was absorbed by them.