Diesel demand in India returns to pre-Covid-19 levels in October 2020

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Photo by Ethan Cull on Unsplash

After petrol, diesel demand has returned to pre-COVID-19 levels as sales rose 8.8 per cent in the first half of October from a year ago, preliminary industry data showed. This is the first annual increase in sales of diesel – the most consumed fuel in the country – since the nation imposed lockdown in late March to curb the spread of the pandemic.

While demand for petrol has been more resilient than diesel due to an increased preference for using personal vehicles instead of public transport to follow distancing norms, October 1-15 sales number showed better than anticipated recovery.

A pent-up demand and the upcoming festive season was expected to support fuel sales but even before that diesel sales rose to 2.65 million tonnes in the first fortnight of October from 2.43 million tonnes a year back and 2.13 million tonnes in the first half of September.

Petrol, which had returned to pre-COVID levels last month, posted a 1.5 per cent rise in sales to 982,000 tonnes in the first half of October, up from 967,000 tonnes in the same period a year back and 968,000 tonnes in the first fortnight of September.

India witnessed unprecedented demand destruction after a nationwide lockdown was imposed on March 25. Oil demand fell by as much as 49 per cent in April. With the easing of restrictions and reopening of the economy, fuel demand recovered sharply in June from April before slowing due to the reimposition of restrictions in certain cities because of coronavirus and flooding in some regions. It started to climb back again in September. Even in September, diesel had shown a month-on-month increase.

But aviation turbine fuel (ATF) sales continue to be way below normal as airlines are yet to resume full services. ATF sales fell 57 per cent to 135,000 tonnes in the first half of October from a year ago but was 2.5 per cent higher than 130,000 tonnes sold in the first fortnight of September. While the Indian economy has started to pick up with lockdown restrictions being lifted since June, local lockdowns by states have hampered the demand quickly picking up.

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