Fuel sales rise in June as restrictions ease and economic activity picks up
Gasoline sales are up 18% from May and 6% from June of last year. Diesel consumption increased 9.5% from May but was 2% lower year on year.
Compared to pre-Covid levels in June 2019, gasoline and diesel sales were 10% and 19% lower, respectively, according to provisional data from state oil companies.
Jet fuel sales in June were up 10% year-on-year, but 62% lower than in June 2019, signaling a long recovery trajectory for the aviation industry.
The demand for cooking gas increased 9.5% year-over-year and 26% year-on-year, likely due to the increased consumer base as well as resellers stocking up in anticipation. of rising prices.
States lift restrictions on mobility and economic activity as the devastating second wave of the pandemic recedes, increasing demand for fuel. Wider rollout of the vaccine has also boosted people’s confidence, encouraging them to leave their homes.
Growth in demand may accelerate in July as the economy accelerates and people try to restore normalcy, but growth will be constrained by high prices, an industry official said.
Gasoline and diesel prices have increased by Rs 27 and Rs 20 per liter respectively in 13 months due to rising crude oil prices, high taxes and expanding trade margins of oil companies.
Indian consumers have never faced such high prices, which translates into wider inflation. While gasoline may still experience sustained growth, people may continue to prefer the safety of personal vehicles and avoid the crowds of public transport. “The fear of the third wave is on everyone’s mind. People will not want to take risks, ”said the executive.
Diesel, which accounts for around 40% of the country’s oil demand, has seen a slow recovery after the first phase and is still down a fifth from pre-Covid levels. High prices are likely to weigh heavily on the consumption of diesel, which is mainly consumed for freight transport, the agricultural sector and emergency generators.
A rebound in demand is expected to increase refinery utilization, which fell sharply in April.