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Indian state refiners' daily gasoline and gas-oil sales declined by about a fifth in May from a month earlier as lockdowns to curb the second deadly wave of Covid-19 hit industrial activities and consumption, preliminary data showed on Tuesday.

Daily gasoline sales in May fell by about 19% from April while diesel consumption, which is linked to industrial activity and accounts for over two-fifths of India's fuel demand, fell by 19.9%, data compiled by state refiners showed.

India's factory activity growth slowed significantly in May as a rise in coronavirus cases whacked new orders and output, the Nikkei Manufacturing Purchasing Managers' Index compiled by IHS Markit showed on Tuesday.

Rising retail prices of gasoline and gasoil along with lockdowns hit fuel demand in May, said an official at one of the refiners. He hoped fuel consumption would soon start improving as the number of infections is declining and states are gradually easing restrictions.

India's official tally of daily infections of coronavirus fell to the lowest in nearly six weeks to 196,427 in the past 24 hours.

Indian fuel demand had recovered to near pre-pandemic levels in March but has been sliding since April owing to a resurgence in infections, prompting Indian refiners to cut crude processing and imports.

Consultancy Rystad Energy expects India's refinery runs to fall to 4.2 million barrels per day (bpd) during May, a 600,000-bpd decrease from its previous forecast.

"After showing surprising resilience during April, we expect India's refinery runs to drop by 700,000 bpd month-on-month in May as refiners will have to adjust throughput to respond to the imminent demand destruction," Rystad said.

State companies - Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp Ltd - own about 90% of India's retail fuel outlets.

Domestic fuel sales by state retailers, however, were higher versus a year earlier when there was a nationwide lockdown.