India's petrol, diesel demand continues to fall in August

Demand for diesel in the country fell for the second month in a row after the onset of monsoon that chipped away consumption in key sectors like agriculture, as per preliminary industry data. Demand for both petrol and diesel had fallen month-on-month in July. While petrol consumption is almost flat in the first half of August, diesel, which is the most widely used fuel in the country, saw demand drop 11.2 per cent during August 1-15 to 2.82 million tonnes from 3.17 million tonnes in the same period of the previous month.

The arrival and intensity of monsoon can have a great impact on diesel demand in the country and consumption traditionally is lower in July-September than in April-June. Monsoon also restricts mobility as well as demand from the farm sector, which uses diesel in irrigation pumps and trucking.

Diesel demand was, however, 32.8% higher year-on-year, thanks to the strong economic growth and a relatively low baseline for the same period in 2021, when the coronavirus-related restrictions had impacted demand. Diesel consumption was 58.2 per cent higher than the 1.78 million tonnes demand during August 1-15 in 2020. It was 23% more than pre-Covid August 2019, the data showed.

Sales of petrol rose up 0.8 per cent to 1.29 million tonnes in the first half of August when compared to 1.28 million tonnes of consumption in the same period of the previous month. The consumption was 30.6 per cent higher than August 2021 and 43.4% more than the first fortnight of August 2020 whereas it was 36% more than pre-Covid levels of August 2019.

In June, auto fuel demand was supported by a surge in summer travel to colder areas of the country when people wanted to escape from heat and go on vacations during annual breaks.

(with inputs from PTI)