India's daily average petrol sales in May dipped by almost a fifth as compared to the previous month due to strict stay-at-home orders across several parts of the country impaired demand. The monthly sales of petrol were the lowest in the country since May 2020.
Sales of diesel, which account for more than half of oil consumption in India, dipped 20% compared to April, and were 30% weaker than the same period in 2019.
As demand shrunk in the home market, Indian refiners were forced to ship out more fuel to other countries, with exports hitting a 13-month high in May, as per data from Vortexa Ltd. However, due to weakness in regional product cracks, exports are likely to take a hit and be cut back in June, as per Serena Huang, lead market analyst at the firm, Bloomberg reported.
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With the second wave crisis in India beginning to ease, some states have started relaxing the Covid-related travel curbs, giving a hope to the fuel sales. Last year, after the pandemic restrictions started lifting up, petrol sales were the fastest to recover from the lockdown’s impact as more and more people preferred buying private cars and motorbikes over taking public transport. Thus, fuel demand is expected to pick up in June, as the second wave of coronavirus is expected to weaken.
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Another factor affecting the fuel demand in May is the rising retail prices of both petrol and diesel. Both the motor fuels were hike 16 times in the month of May alone, with petrol breaching even the ₹100-mark in some cities including Mumbai and Bhopal. In the 16 hikes implemented on the fuels last month, the price of petrol has gone up by ₹3.83 per litre, while diesel price has seen a hike of ₹4.42 per litre.