Delayed monsoon boosts petrol, diesel sales in first half of July

The monsoon noticeably impacts fuel consumption in India. Sales of petrol and diesel typically fall during the heavy monsoon months (June–September), as heavy rains slow down vehicular movement, disrupt major infrastructure projects, and decrease the need for diesel-powered agricultural irrigation pumps, leading to a month-on-month drop in consumption. However, late-arriving or below-normal monsoons can have the opposite effect. Petrol and diesel sales by India's three state-run fuel retailers have surged sharply in the first half of July this year, owing to the below-normal monsoon rainfall that boosted fuel demand from motorists.

The preliminary sales data released by Indian Oil Corporation Ltd. (IOCL), Bharat Petroleum Corporation Ltd. (BPCL) and Hindustan Petroleum Corporation Ltd. (HPCL) have shown that petrol sales climbed 22.9% to 1.63 million tonnes during July 1-15, compared with 1.33 million tonnes sold in the corresponding period a year earlier. Also, the volume was 26.7% higher than the 1.29 million tonnes sold during the first half of July 2024 and 38.6% above the level recorded in the same period of 2023. However, compared to the first half of June this year, petrol sales dropped 4.4% from 1.71 million tonnes.

Diesel sales, which are a key indicator of economic activity in India, rose 20.9% year-on-year (YoY) to 3.46 million tonnes in the first half of July from 2.87 million tonnes a year earlier. The volume was 18.4% higher than in the corresponding period of 2024 and 13.9% above the first half of July 2023. On a month-on-month (MoM) basis, diesel sales declined 12.1% in the first half of July from 3.94 million tonnes in the first half of June.

Fuel sales typically moderate with the onset of the monsoon, which reduces demand for running agricultural irrigation pumps as well as slows vehicular movement. But this year, the monsoon rains arrived late, which led to farmers using diesel to run pumps to irrigate farms. The MoM sales in July were lower because June is typically the time when holiday travel picks up due to school and college holidays.

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