The country’s fuel consumption in September rose month-over-month as economic activity continued to accelerate, government data showed on Wednesday, but soaring global oil prices could block the recovery the third largest importer and consumer of oil in the world.
Fuel consumption, an indicator of oil demand, totaled 15.92 million tonnes last month, up slightly from August and 5.2% more than in September 2020, according to site data. Petroleum Planning and Analysis Cell (PPAC) Web.
But overall, consumption was still 1.7% lower than in September 2019. Monsoon rains and shipping constraints led to lower consumption in August.
Gasoline sales were down 3.5% from August, but were up 6% year-on-year and 9.5% from September 2019.
The increase in personal mobility has spurred demand for gasoline, “which has clearly exceeded pre-COVID levels,” said Hetal Gandhi, director of CRISIL Research.
Diesel consumption, which typically accounts for around 40% of refined fuel sales, also fell 1.7% month-on-month to 5.51 million tonnes, and was down 5.6% from to September 2019.
But diesel sales increased slightly compared to the same period last year. “While overall diesel demand still remains below pre-COVID levels, a recovery is in line with rush ahead of the holiday season,” Gandhi added.
However, surging global crude prices could slow the rebound, with India signaling late last month that high global oil prices could also accelerate the transition to alternative energy sources. [O/R]
“I see a gradual pick-up in demand from here, but high oil prices could pose a serious problem for Indian consumers,” Refinitiv analyst Ehsan Ul Haq said.
Compared with a year ago, sales of liquefied petroleum gas (LPG) increased 4.5% to 2.36 million tonnes, while sales of naphtha fell 0.5% to 1, 11 million tonnes. Sales of bitumen, used for road construction, increased 7.2 percent, while fuel oil consumption increased 21 percent.
(Except for the title, this story was not edited by DAILYNEWSCATCH staff and is posted from a syndicated feed.)