Petrol price peaks but so does demand, sales now at 3-year high. Here's why
Petrol prices may have remained steady the past few days but are still firmly and well beyond the three-digit mark across the country. But while each litre of petrol may be costlier than ever before, demand too has returned to pre-pandemic levels with the country's fuel sales at a three-year high.
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Reuters cited data from the Indian oil ministry's Petroleum Planning and Analysis Cell to report that consumption of fuel rise 4.2% to 19.41 million tonnes in March when compared to the same month of 2021. Sales of petrol in particular, saw an increase of 6.2% to 2.91 million tonnes last month when compared to March of 2021.
But what powered petrol sales in the month of March and will the demand continue its upward trajectory?
Fear of price hikes
One possible reason for sales of petrol and diesel increasing in the month of March was the looming possibility of a substantial price hike. Prices of both fuels had remained unchanged in the months leading up to March but with elections in several states concluding and the volatile global situation with Russia invading Ukraine, a price hike was only a matter of time. And time came on March 22 when fuel prices were revised for the first time in four months. People at large, however, may have tanked up vehicles in anticipation before this move, hence pushing sales up.
Easing of Covid curbs
The country has relaxed most restrictions in the wake of falling Covid-19 cases. This means that stringent rules and regulations on movement too has been eased considerably. Many offices are opening up which is further adding to the demand for fuel.
The future outlook
Crude oil prices in the international market has fallen below $100 per barrel in recent days and while there has been no reduction in petrol or diesel prices in India thus far, there has been no change the other way either.
It is reported that Indian refiners have bought at least 16 million barrels of cheaper Russian oil for May which could further ease supply issues as well as issues emanating from a volatile global crude oil prices.