Second Covid wave hammers India’s fuel demand in April

NEW DELHI: India’s diesel consumption in April fell 10% and petrol 4% from the same month of 2019, the pre-pandemic year with ‘normal’ offtake, as a virulent second wave of Covid-19 infections hammers the world’s third-largest oil consumer.
A comparison with April 2020 is redundant as the nationwide lockdown, the world’s harshest, had erased 70% of demand. But a month-on-month comparison of data shows April diesel sales down nearly 2% from March, when consumption had jumped 10% from February to 95% of the pre-pandemic level. Petrol consumption saw a sharper fall at 6% in April from a month ago, when sales had posted 11% monthly jump to top the pre-pandemic level by 5%.
An early recovery in demand appears challenging at this point as major cities across states are being locked down or put under weekend curfew to check the virulent spread of the virus. This has impacted the movement of people and goods as work-from-home stages a major comeback and people prefer to stay put. The drop in diesel demand, a proxy for economic activities, particularly reflects the impact of Covid curbs on manufacturing and project activities as well as interstate passenger movement. All have a bearing on diesel demand.
Jet fuel sales have tanked 39% in April from the same month of 2019 and more than 11% from March, when sales had posted some gains to reach 35% short of the pre-pandemic level. This means the woes of airlines are not going away anytime soon.
Anticipating further loss of demand, major state-run refiners are looking at exporting fuels to the US and Europe, where consumption is seen bouncing back on the strength of mass vaccinations.
Demand for LPG, or household cooking gas that is largely imported, also dipped by almost 4% from a month ago, while coming down a fraction from April 2019. In March too, LPG consumption had shown marginal growth over the same period of 2019 and edged only 1.3% up from the same month of 2020.
This is in sharp contrast to the lockdown period of 2020 when LPG was the only fuel to have posted sustained growth as families remained confined within their homes, leading to more cooking. The government’s offer of free LPG cylinders offered to poor households under the Ujjwala scheme also contributed to the growth.