Monsoons Witness Dip In Petrol, Diesel Sales As Rains Impact India’s Mobility
After reaching a record high in May 2023, India's consumption of petrol and diesel fell in June and July as the monsoons and continuous rains curtailed travel and hindered mining and building projects across.
As per the data by Petroleum Planning and Analysis Cell (PPAC) for July 2023, India's diesel consumption slipped 13 per cent m-o-m to 6.9 million tonnes (MT) on a provisional basis, while petrol consumption fell 9 per cent to 2.9 MT.
According to oil marketing companies (OMC), "The decrease in demand for car fuels has an impact on mobility. The monsoon season had an influence on mining and building. In addition, the farm sector's need for fuel is now low. The disparity was more pronounced in July compared to June since travel and tourism activities were reduced.”
However, the OMCs opine that the diesel demand will pick up during the sowing season. The consumption is unlikely to pick up in the next two months due to rains. In general, June-September is a period of low mining and construction activity.
Overall, the demand for refined petroleum products decreased from 19.4 MT in June to 18.1 MT in July 2023, a decline of 7 per cent month over month.
Liquefied petroleum gas (LPG) usage, however, increased by 9 per cent to 2.4 MT last month from 2.2 MT in June 2023. The use of naptha, a vital feedstock for petrochemicals, increased by 9 per cent to 1.1 MT. Despite the rain, international travel throughout the month saw the consumption of aircraft turbine fuel (ATF) increase by 3 per cent month over month to 664,000 tonnes. The monsoon season is a slow time for airlines.
Analysts predict that the quarter between October and December will see an increase in demand for petroleum products due to increased industrial activity and holiday preparations. Better pricing power for petrol and diesel would result from stronger economic growth over the next two to three years and the possible pass-through of the supernormal marketing margins being made on retail fuels.
