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If the consumption pattern in the first four months of the current fiscal is any indication, then demand of diesel, the largest consumed transportation fuel, has been flat, despite its price falling by almost 24 per cent.
Diesel was de-controlled in October last. Data from the Petroleum Planning and Analysis Cell show that the growth in diesel consumption has almost been flat between April and July 2015 at 24.933 million tonne against 24.292 million tonne in the same period last year. In fact, in May and July, consumption had fallen on a year-on-year basis.
Today, diesel is available at ₹44.95 a litre in Delhi compared to ₹58.97 before it was de-regulated.
Overall economy However, the overall economic environment has hurt diesel sales.
“Many businesses that are big diesel consumers have not been doing well. Besides, agriculture demand has been weak resulting in diesel demand not growing,” an official at Indian Oil Corporation, the country’s largest fuel retailer, said.
“When the prices were regulated, the demand was much higher because the general economic conditions were also much better,” the official added.
Some amount of growth was witnessed in petrol sales. Petrol consumption is much lower than diesel in the country.
During April-July 2015, petrol consumption rose almost 14 per cent to 7.059 million tonne compared with 6.227 million tonne in the same period last year.
Growth in petrol consumption has been mainly due to two-wheeler sales. Both petrol and the two-wheeler segment have witnessed a double-digit growth.
The reason for petrol sales growth is attributed to narrowing price difference between the two auto fuels.
Giving the outlook, the official said, “August has been a little better but let us see how September does. During the festival season it is petrol which is sold more than diesel.”
Truckers unhappy Meanwhile, transporters are not pleased with the drop in diesel prices. The two rounds of diesel price cuts in August have led to a 5-6 per cent fall in truck rentals on trunk routes, according to the Indian Foundation of Transport Research and Training (IFTRT).
The truckers are also suffering from weak cargo offerings from the agricultural and manufacturing sectors, according to IFTRT.
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