Fuel demand in India: Fuel, power demand sees double-digit drop in May | India Business News
Latest market data for the first fortnight of the month shows petrol and diesel consumption shrinking 20%, while jet fuel sales dipping 38% from the same period of April. The decline is steeper at more than 27% for petrol, nearly 29% for diesel and 59.5% for jet fuel as compared to the same period of 2019 – the pre-pandemic year with ‘normal’ consumption.
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Power demand dropped 12% to 51.6 BUs (billion units) during the period under review from 60.6 BUs as industries and commercial establishments pruned or shuttered their operations, power ministry data shows.
Demand for LPG, or household cooking gas, is the only fuel to post monthly growth in May at more than 7% and shows an increase of 16% from the same period of 2019.
According to Hindustan Petroleum chairman M K Surana, the situation is not as bad as last summer when fuel demand had tanked 70% and power demand shrunk by a quarter as the entire country was put under the world’s strictest lockdown.
“Let’s wait till the month-end. Lockdowns sequentially progressed across states this fortnight. But the situation is different from last year. This time you see vehicles on city roads as offices haven’t been shut, inter-state traffic is on, industries by and large haven’t shut down and projects not halted, except maybe small constructions etc. I believe demand recovery this time will be faster than last year,” Surana told ToI.
He said refiners can manage the situation with small reductions in refinery thruput and won’t need to shut down. “You don’t just see today’s demand. You also look at how demand will pan out. There are signs of improvement in the Covid situation,” he said.
Surana said diesel sales have also lost support from the farm sector as sowing is nearly complete. Besides, the end of electioneering also took away some additional support in the last two months. Petrol consumption has slumped as people have become more careful and staying home either because of curbs or preferring to work from home, while leisure travel plans have also been put off.