Sale of diesel in India during August 2020 declined by 12% over July 2020: PPAC

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India’s consumption of diesel in August 2020 was 12 per cent lower than the levels recorded in July 2020, indicating a definite slowdown of economy as lockdown curbs in many areas has slowed industrial and commercial consumption. On a year-on-year basis, diesel consumption was down 20.7 per cent to 4.9 million tonnes in August. Diesel sales itself contribute to around 40 per cent of the total consumption of petroleum products in the country.

According to provisional data by the Petroleum Planning and Analysis Cell (PPAC) of India’s petroleum ministry, petrol sales were down 7.5 per cent annually in August, but the consumption volumes were 5.4 per cent higher than the preceding month. Demand for the aviation turbine fuel (ATF) fell 61.6 per cent annually in this period, but recorded a 9.9 per cent rise from July levels with the gradual opening of the domestic aviation sector.

While rural agricultural demand is mainly driving diesel consumption, floods in Bihar and northeastern states has moderated the speed of demand recovery. Lack of sales of commercial vehicles has also been a factor in not allowing significant increase in diesel sales.

Sales of liquefied petroleum gas (LPG) was the only major product to register growth in the lockdown period due to government scheme of free cylinder refills for poor households. However, LPG sales dipped 5.3 per cent year-on-year in August 2020.

Consumption of bitumen, mostly used in road construction, increased 36.8 per cent annually in the month, mainly on a lower base of abnormally low sales in August, 2019. Consumption of petroleum products had moderated even before the lockdown due to extended monsoon and weak industrial activity. Domestic sales of petroleum products in FY20 had inched up 0.2 per cent year-on-year to 213.7 million tonnes.

Similarly, power consumption in the country fell 1.6 per cent year-on-year to 109.7 billion units in August and industrial and commercial activities remained muted in the aftermath of the nationwide lockdown imposed to contain the coronavirus outbreak. Electricity consumption in the month was even 2.2 per cent lower than July, with the advent of the monsoon reducing domestic home-cooling demand.

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