Fuel sales jump in Sep as economy activity picks up before festival season

Gasoline and diesel sales in India surged in September as economic activity picked up as the holiday season approached and the end of the monsoon boosted demand, preliminary industry data showed.

Gasoline sales rose 13.2 percent to 2.65 million tons in September, compared to 2.34 million tons consumed in the same month last year. Sales were 20.7 percent higher than in September 2020 and 23.3 percent higher than in September 2019 before the pandemic.

Compared to the previous month of August 2022, however, demand was 1.9 percent lower.

Diesel, the country’s most widely used fuel, saw sales surge 22.6 percent to 5.99 million tonnes in September compared to the same month last year. Consumption increased by 23.7 percent compared to September 2020 and almost 15 percent higher than before Covid 2019.

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The fuel, sales of which fell nearly 5 percent in August compared to July, saw demand rise 1.3 percent mom.

Industry sources said the end of the monsoon rains in most parts of the country and a recovery in the farming season led to an increase in diesel demand. Rain usually limits mobility and demand from the agricultural sector, which uses diesel for irrigation pumps and trucks.

The approaching festival season also stimulated the economy and increased demand.

Auto fuel sales fell in July and August due to the monsoon and lower demand. That decline came after a spike in June, helped by increased summer travel to colder areas of the country to escape the heat and holidays during annual breaks at educational institutions.

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As the air transport sector opened up, India’s total passenger traffic at airports approached pre-Covid-19 levels.

Accordingly, demand for jet fuel (ATF) rose by 41.7 percent to 5,44,700 tons in September compared to the same month last year. It was 81.3 percent higher than in September 2020 but almost 12 percent lower than in pre-Covid September 2019.

The sources said that while domestic air travel is back to pre-Covid levels, international traffic is lagging behind due to ongoing restrictions in some countries.

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With strong economic growth of 7 percent, India’s oil demand has been rising steadily since the country eased pandemic lockdowns.

Sales of cooking gas LPG rose by 5.4 percent year-on-year to 2.48 million tons in September. LPG consumption was 9.3 percent higher than in September 2020 and 14.9 percent higher than in September 2019.

Demand rose 4.26 percent month-on-month compared to 2.38 million tons of LPG consumption in August, the data showed.

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