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India’s fuel demand jumps 24% year-on-year in May -Breaking


© Reuters. FILEPHOTO: Two oil tankers were parked in front of a fuel station on the outskirts Kolkata, February 3, 2015. REUTERS/Rupak De Chowdhuri

By Kavya Guduru

(Reuters) – India’s May fuel consumption rose 23.8% from a year ago, continuing a recovery of a low base in 2021. This was when India was third largest oil consumer and COVID-19 had just begun.

According to the data of the Indian Oil Ministry’s Petroleum Planning and Analysis Cell, 18.27 Million tonnes was consumed in fuel last month. This is a proxy for oil consumption.

The increase in consumption last month was the largest year-on-year leap since April 2021. Also, consumption rose by 0.4% in April, compared to April.

Ehsan Ul Haq, Refinitiv analyst, stated that the annual increase was due to a “lower base” as there was less demand for COVID drugs in May 2021. However, Ehsan Ul haq said that it was still surprising how much monthly growth was.

High oil prices will likely have an effect on the consumption of fuel in the next few weeks. “High fuel prices don’t bode well for motorists around the world,” he said.

The consumption of diesel increased 31.7% year-on-year in May to 7.29million tonnes, which was an increase of 32.6% over two years.

The 3.02million tonnes of gasoline sold in 2012 was 51.5% greater than the previous year.

Preliminary fuel sales data for June 1 showed that daily gasolineoil sales to Indian state refiners fell in May from April, as lower consumer spending reduced truck movement.

India has seen an increase in gasoline sales since its pandemic lockdowns were lifted. This is because Indians continue to choose to drive their own vehicles to save fuel and avoid heatwaves.

A Reuters poll suggests that India’s retail inflation slowed slightly in May. But, the central bank is likely to keep it well below its upper tolerance limit for a fifth month. The reason being that rising food costs outweighed a decline in fuel prices caused by cuts to fuel tax.

DOMESTIC SALES in Million Tonnes

2022 2022 2022 2021 2021 2021

May April April May May April Mars

Diesel 7.29 7.20 7.70 5.53 6.68 7.23

Petrol 3.02 2.80 1.91 2.39 2.74

LPG 2.17 2.46 2.48 2.16 4.11 2.26

Naphtha 1.09 1.14 1.25 2.24 1.28

Jet fuel 0.60 0.55 0.54 0.27 0.41 0.47

Kerosene 0.10 0.10 0.11 0.14 0.11 0.16

Petroleum Oil 0.54 0.52 0.59 0.42 1.51 0.51

Bitumen 0.70 0.76 1.94 0.66 0.83 1.01

TOTAL 18.27 18.20 19.83 4.76 16.60 18.63

Note: The total figures might not add up because not all items were included in the table. Also, numbers are round. There may be revisions to the previous month’s numbers.