Diesel just 6% short; Petrol sales back to pre-Covid level in September

New Delhi: Petrol sales have fully recovered to pre-Covid level and diesel is down just about 6 per cent in the first half of September from a year earlier, signalling people and industry were eager to get on with their lives despite a record jump in infection rates.

In the first fortnight of September, petrol sales rose 2 per cent from a year earlier and 7 per cent compared to August. Diesel sales were down 5.5 per cent year on year but rose 20 per cent month on month, as per sales data from state-run fuel retailers who control nearly 90 per cent of the domestic market.

This is a dramatic turnaround for fuel demand following weak recovery in July and August. Demand for diesel and petrol were down by 21 per cent and 7.4 per cent, respectively, in August from a year earlier.

Cooking gas consumption, which was robust even during the lockdown, has also risen 13 per cent year-on-year and 13.5 per cent month-on-month. Jet fuel demand has also grown 16 per cent compared to August but is still 60 per cent down from a year earlier due to limited domestic flyers and restrictions on international flights.

“With further easing of lockdown, more and more people are going to work and economic activity is increasing, which has boosted demand for fuel,” an oil industry executive said. “Despite a spurt in Covid cases, people appear to be less scared and eager to get on with their lives.”

Fuel demand is expected to further rise in October as the festival season approaches, the executive said, adding that falling fuel prices can further help. Petrol and diesel prices have fallen by 50 paise and one rupee per litre, respectively, this month and a sharper reduction could follow if state oil companies decide to pass on the benefits of the recent big decline in international rates.

Petrol sales have also risen partly due to people preferring personal vehicles to crowded public transport for health safety reasons in the middle of a pandemic. A sharp increase in car sales has also boosted fuel demand. Passenger vehicle sales rose 14 per cent in August from a year earlier and two-wheeler sales gained 3 per cent.

Local lockdowns and quarantine conditions imposed by state governments are getting lighter by the day, permitting easier movement of people and trucks between states.

Some industry executives, however, still doubt if the fuel demand recovery can sustain for long amid a rapid rise in Covid infections. “Such high infection rate has the potential to put the brakes on recovery. About one thousand people are still dying of Covid and life is far from normal for anybody,” and executive said.