New Delhi

India’s diesel consumption declined by almost 5 per cent on a month-on-month basis in August this year to 6.3 million tonnes (MT), the lowest in the 2022 calendar year and FY23 so far, due to restricted mobility on account of monsoon rains.

According to the data from the Petroleum Planning and Analysis Cell (PPAC), the diesel demand fell for the second consecutive month in August. In fact, it is the lowest since September 2021 (5.5 MT).

The consumption of diesel, the most widely consumed fuel and the mainstay of the transport sector, generally declines during the July-September quarter as rains hinder movement. Analysts said that consumption will pick up in September as sowing activity picked up in the country in the last week of August.

Petrol sales during August 2022 rose by 7 per cent m-o-m to 3 mt compared to 2.8 mt in July this year, comparable to consumption levels during May-June 2022, which was aided by heightened tourist activity as educational institutions are closed for vacations.

Under recoveries

The state-run oil marketing companies (OMCs), which control almost 90 per cent of the domestic retail market, have not raised prices of auto fuel in a bid to help tame the high inflation. This is leading to under recoveries, but company officials say that the situation is temporary and crude oil prices will soften by the end of the year. Crude prices have already softened and are hovering in the range of $92-95 per barrel.

During August, the price of the Indian basket of crude oil varied between $91.45 and $102.88 per barrel, with the average price at $97.40 per barrel, which is 7.67 per cent lower than the average price of $105.49 per barrel for July 2022.

“Oil Marketing Companies continued to incur losses on sale of petrol, diesel and LPG. This is in addition to the loss of ₹23,799 crore incurred during April–June, 2022,” the Ministry of Petroleum & Natural Gas said for the month of August. The Ministry however did not specify the amount.

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