India's fuel demand rises 16.3% in June over excise duty cut, delayed monsoon
India's fuel demand increased robustly in June this year owing to the excise duty reduction and delayed monsoon as well, reports ANI. The central government on 21st May this year announced a reduction of excise duty on petrol by ₹8 per litre and ₹6 per litre on diesel. This move came as a much-required breather for the consumers. This eventually helped in boosting demand for petrol and diesel.
S&P Global Commodity Insights states that India's demand for fuel increased to 704,000 barrels per day, or 16.3 per cent on a yearly basis in June 2022. The research also said that retail fuel prices have been constant on the pump despite a volatile international market, suggesting that there may be some under-recoveries by oil marketing companies in selling transport fuels in the retail market.
The report further states that the central government on 1st July this year imposed special additional excise duty on exports of petrol and diesel, to the tune of ₹6 per litre on petrol and ₹13 per litre on diesel. This move could help meet the country's fuel demand. However, the research also projected in the near-term, India's oil demand is expected to slump on a quarterly basis by 140,000 barrels per day during the July-September quarter due to the ongoing monsoon season. Also, the fuel demand in India is expected to rebound in the October-December quarter on the back of the festival and holiday seasons.
Meanwhile, the Maharashtra government on Thursday announced a price reduction of petrol and diesel in the state. With the VAT reduction in the state to the tune of ₹5 per litre of petrol and ₹3 per litre of diesel, motor fuels will be slightly affordable for the consumers, which is expected to boost demand.