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Money News

India's fuel demand extends recovery in June

NEW DELHI (Reuters) - India’s fuel consumption rose in June compared with May, continuing with a gradual recovery as industrial and transport sectors reopened after a stringent lockdown, a government statement issued on Wednesday said.

A worker holds a nozzle to pump petrol into a vehicle at a fuel station in Mumbai, May 21, 2018. REUTERS/Francis Mascarenhas/Files

Fuel consumption - a proxy for oil demand in Asia’s third largest economy - totalled 11.8 million tonnes in June, a decline of about 12% from a year earlier, it said.

The country’s fuel demand almost halved in April to the lowest since 2007 as the country came to a standstill after it went into a lockdown on March 24 to curb the spread of the coronavirus.

State-retailers’ gasoline sales in June rose by about 36% from May to about 2.04 million tonnes.

Sales of gasoil, which accounts for about two-fifths of the country’s overall fuel sales, rose by about 20% in June compared with May to 5.54 million tonnes.

However, gasoline and gasoil sales in June are still down by about 15% and 17.1% respectively from a year earlier.

Oil minister Dharmendra Pradhan last week said fuel demand could normalise by the end of September.

State companies Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum own about 90% of the retail fuel outlets in India.

Sales of liquefied petroleum gas (LPG) rose nearly 17% in June from a year ago while jet fuel declined by 67.3% during the same period.

Demand for industrial fuels such as petcoke, naphtha and marine fuel also rose in June compared to a year earlier, indicating a pick-up in industrial activity.

To meet rising fuel demand, state refiners boosted crude processing to about 85% of designed capacity compared to about 55% at the beginning of April, the statement added.[O/INDIA2]

Reporting by Nidhi Verma, editing by Louise Heavens and Emelia Sithole-Matarise

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