Petrol, diesel sales return to pre-Covid levels1 min read . Updated: 17 Mar 2021, 02:15 PM IST
Despite the recovery of fuel sales to pre-Covid levels, oil marketing companies are bullish about demand growth.
India's fuel demand, including auto fuels like petrol and diesel, has returned to pre-Covid levels and a reflating economy will help consumption grow in near future, according to Indian Oil Corporation, the top oil firm of the country.
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Fuel sales had fallen by a record 45.8% in April 2020 when a nationwide lockdown was imposed to curb the spread of coronavirus infections. Demands for fuel started to recover with the easing of lockdown restrictions, with petrol returning to normal growth first and now diesel too is back at pre-Covid levels.
While the petrol sales had reached pre-Covid levels a couple of months back, diesel sales were up 7.4% in the first half of March 2021, as compared to the same period a year ago. Diesel sales in the first half of March 2021 rose to 2.84 million tonnes while petrol demand was up 5.3% to 1.05 million tonnes.
As Indian Oil Corporation (IOC) Chairman Shrikant Madhav Vaidya said to PTI, the fuel sales are back on track. However, IOC is bullish about fuel demand recovery as the economy grows. But the vaccination drive is expected to drive demand further in the sector.
This is the first annual rise in petrol sales since October 2020.
India's economy returned to the positive growth trajectory in the fourth quarter of 2020 as its real GDP expanded by 0.4% year-on-year after contracting for two quarters. This was after the provincial and localised lockdowns were lifted amid a fall in the daily infection number of new Covid-19 cases.
Crude oil suppliers group OPEC's monthly oil report last week forecast a 13.6% jump in India's oil demand in 2021 to 4.99 million barrels per day. India's oil demand had fallen 10.54% in 2020 to 4.40 million bpd from 4.91 million bpd in 2019.
As OPEC said the encouraging macroeconomic indicators, together with significant decreases in COVID-19 cases across the country, provided a solid foundation for the 2021 oil demand outlook in India. The recent positive developments in the industrial activities across India will result in industrial fuels being the backbone for oil demand growth in 2021, with a healthy rebound for transportation fuels providing further support, it said adding the aviation sector will remain under pressure throughout 2021 and will also be a major source of uncertainty.