Fuel Consumption Rises In August On Strong Manufacturing
India's fuel consumption in August inched up from a 10-month low, government data showed on Wednesday, as strong factory activity in the world's third-biggest oil importer and consumer offset the usual monsoon lull.
Total consumption in August, a proxy for oil demand, totalled 18.57 million metric tonnes, up 2.5 per cent from 18.11 million tonnes in July. It was up 6.5 per cent a year ago.
"The main reason is the strong economy," LSEG analyst Ehsan Ul-Haq said, adding that if demand is rising during the monsoon season, it could surge even higher in the festive season.
India's factory growth accelerated at the fastest pace in three months in August, driven by strong growth in new orders and output, according to a private survey.
Sales of gasoline in August were 3.7 per cent higher than the previous month at 3.09 million tonnes.
However, sales of diesel, mainly used by trucks and commercially-run passenger vehicles dropped about 3.2 per cent month-on-month to 6.67 million tonnes in August.
"People are gradually shifting towards gasoline-driven cars all over the world. Diesel demand could also be down due to lower agricultural demand amid monsoon rains," Ul-Haq said.
Fuel demand in India typically falls during the four-month monsoon season that starts in June as parts of the country are affected by heavy floods.
Monsoon rains were 36 per cent below average in August, marking India's driest August in more than a century, but India could receive an average amount of rainfall in September.
Sales of bitumen, used for making roads, rose 4.3 per cent from July, while fuel oil use dropped 6.4 per cent in August.
Cooking gas, or liquefied petroleum gas, sales increased about 3 per cent to 2.46 million tons and naphtha sales rose 4.7 per cent to 1.1 million tons, the data showed.
