Petrol demand returns to pre-Covid-19 levels, diesel demand still down

India’s petrol sales rose for the first time in the first half of September since the country’s lockdown in late March, signalling demand may have returned to pre-Covid-19 levels.

Petrol sales between September 1 and 15 rose 2.2 per cent year-on-year and were up 7 per cent over the previous month, according to preliminary industry data.

Diesel sales continue to be in negative territory, with demand falling 6 per cent year-on-year. But the demand was 19.3 per cent higher over August 2020.

This is the first time that petrol sales in the world’s third-largest oil importer have risen since the March 25 nationwide lockdown crippled economic activity and sent demand plummeting.

Petrol sales rose to 9,65,000 tonnes during the first half of September as compared to 9,45,000 tonnes in the same period a year back and 9,00,000 tonnes during August 1-15, 2020.

Demand for diesel, the most consumed fuel in the country, fell to 2.13 million tonnes from 2.25 million tonnes in September 1-15, 2019. Sales were 1.78 million tonnes during the first half of August this year.

Industry sources said while the Indian economy has started to pick up with lockdown restrictions being lifted since June, local lockdowns by states have hampered the demand quickly picking up.

Petrol sales have picked up as commuters are increasingly preferring to personal transport to public transport.

The September rise in petrol is a turnaround from the sharp drop witnessed in August. Diesel and petrol sales have fallen by 21 per cent and 7.4 per cent, respectively in August from a year earlier.

Jet fuel sales at 1,25,000 tonnes were down 60 per cent in the first half of September but was 15 per cent higher than 1,03,000 tonnes sales in August.

Cooking gas LPG sales were up 12.5 per cent at 1.13 million tonnes year-on-year and 13.5 per cent month-on-month.

Car sales rose 14 per cent in August from a year earlier, while two-wheeler sales increased by 3 per cent.

Shrikant Madhav Vaidya, Chairman of Indian Oil Corp (IOC) - the country’s largest fuel retailer, earlier this week stated that there were signs of demand recovery, but the pandemic’s impact could linger and monthly consumption may edge back to pre-virus levels by the end of the year.

Fuel demand is expected to further rise in October as the festive season kicks in.