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India’s fuel consumption rose for a third straight month in November, helped by reviving transportation and business activity, although a year-on-year fall pointed to a sluggish economic recovery.
Consumption of refined fuels, a proxy for oil demand, in November rose 0.4 per cent from the previous month to 17.83 million tonnes, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum and Natural Gas released on Saturday showed.
Diesel consumption, a key parameter linked to economic growth and which accounts for about 40 per cent of overall refined fuel sales in India, edged up 0.6 per cent month-on-month, but fell 7 per cent to 7.04 million tonnes on an annual basis.
Gasoil consumption in India, which has been one of the primary drivers for Asian demand for the fuel in recent weeks, alongside steady growth in overall fuel sales, has prompted the country’s refiners to ramp up capacity.
“For Asia Pacific gasoil/diesel demand, recovery is accelerating in Q4 2020, driven mainly by India as the country now enters high seasonal gasoil/diesel demand period,” said WoodMac research associate Qiaoling Chen.
Sales of petrol, rose by 0.4 per cent from October and 5.1 per cent from a year earlier to 2.66 million tonnes.
Covid effect
India’s daily coronavirus cases have declined steadily, although the country has the world’s second-highest number of infections with more than 9.8 million cases.
Total fuel demand fell 3.7 per cent on year after registering its first year-on-year increase since February in October, as manufacturing and services slowed with consumers staying indoors to avoid getting infected by the novel coronavirus.
Liquefied petroleum gas (LPG) sales increased by about 4 per cent to 2.35 million tonnes from a year earlier, but fell 2.9 per cent from the previous month, while naphtha sales rose by 7.2 per cent to 1.34 million tonnes year-on-year.
Sales of bitumen, used for making roads, were up about 19 per cent on year, while those of fuel oil increased by about 8.7per cent.
Read more: Petrol price at two-year high
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