India’s September fuel demand steady, rising oil prices cloud outlook

India’s September fuel consumption crawled higher month-on-month as economic activity continued to ramp up, government data showed on Wednesday, but soaring global oil prices could stall a recovery in the world’s third-biggest oil importer and consumer.

Fuel consumption, a proxy for oil demand, totalled 15.92 million tonnes last month, up slightly from August and 5.2% higher than in September 2020, data on the Petroleum Planning and Analysis Cell (PPAC) website showed.

But overall, consumption was still 1.7% below September 2019. Monsoon rains and shipping constraints had prompted a dip in consumption in August. Petrol sales slipped 3.5% from August, but climbed 6% year-on-year and 9.5% from September 2019.

Increased personal mobility drove petrol demand, “which has clearly moved above pre-COVID levels”, said Hetal Gandhi, director at CRISIL Research.

Consumption of diesel, which usual accounts for about 40% of refined fuel sales, also eased 1.7% month-on-month to 5.51 million tonnes, and was 5.6% lower compared with September 2019. But diesel sales rose slightly from the same period last year.

“While overall diesel demand still remains below pre-COVID levels, a recovery is in line with a rush ahead of the festive season,” Gandhi added.

ET Energy World
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