India’s oil demand nears normalcy as economy gathers momentum

(Representative photo)
(Representative photo)

Consumption of petroleum products across India reached 88% of the pre-Covid-19 levels as economic activities gathered steam with the easing of lockdown, the ministry of petroleum said in its official statement.

“With the gradual lifting of lockdowns and beginning of unlocking of the economy in a phased manner allowing resumption of industrial activity and movement of people, total petroleum products consumption has reached to 88% in June’20 (11.8 million metric tonne) compared to June’19 (13.4 million metric tonne), indicating the increase in production activity across all segment of economic spectrum,” the petroleum ministry said in a statement.

In April the sale of petroleum products had fallen to its lowest since 2007 as the nation was locked down to contain the COVID-19 pandemic. India is the world’s third largest oil consuming nation. Demand revived in May as business activities resumed and in June it touched 88% of the earlier consumption. The consumption of petrol in June 2020 touched 85% of last year’s level (2 million metric tonne vs. 2.4 million metric tonne) and diesel consumption reached 82% in June 2020 (5.5 million metric tonne vs. 6.7 million metric tonne) when compared with the same period a year ago. Demand for the LPG fuel continues to rise with a robust growth of 16.6% in June 2020 as compared to June 2019.

“The timely arrival of monsoons and a pick up in agricultural activities during kharif season helped to mark acceleration in diesel consumption that gained 96% on April 2020 level volume (5.5 million metric tonne in June 2020 from 2.8 million metric tonne in April 2020),” said the petroleum ministry statement.

With resumption of domestic flights at 33% capacity and repatriation international flights under the Vande Bharat Mission for international passengers, ATF (aviation turbine fuel) consumption jumped four times in June 2020 when compared with April 2020. ATF sales was 52 thousand metric tonnes in Apr 2020 vs. 201 thousand metric tonnes in Jun 2020)

“Similarly, with restart of major road construction projects, Bitumen consumption has registered a solid growth of 32% in June 2020 compared to June 2019,” said the petroleum ministry.

“Overall the consumption of all petroleum products has significantly increased from April 2020 levels of 49% (6.6 million metric tonne in April 2020 vs. 13.4 million metric tonne in April 2019) to 88% level in June 2020 (11.8 million metric tonne in June 2020 vs. 13.4 million metric tonne in June 2019), as this comes in the backdrop of Indian economy gradually getting momentum with the ease of lockdown restrictions and revival of economic activities that are slowly getting back on track,” explained the petroleum ministry in its statement.

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