India’s oil demand rose 1.8 per cent in the first nine months of the current fiscal, slower than 2.7 per cent in the year-ago period. Dependence on oil imports also rose as domestic production fell 5.8 per cent in the same period.
“Severe winters in northern India and agitations in some states have disrupted normal economic activities,” the oil ministry’s monthly consumption review report said on December consumption. Sharp drop in the sale of diesel-fuelled vehicles, extended rain and preference for petrol vehicles weighed on diesel demand during the financial year, according to the report.
Petrol, however, roared at 8.4 per cent due to people’s preference for petrol-driven vehicles and better rural connectivity, the report said. In December, petrol growth slowed to 3.2 per cent.
Slowing economy has decelerated consumption of petrol, diesel and various industrial fuels in recent months. India’s economy is expected to grow at 5 per cent this financial year. Massive expansion of cooking gas customers in recent years, to more than 95 per cent of homes, has kept consumption of liquefied petroleum gas (LPG) high at 7.6 per cent this year.
In December, the demand for LPG grew 9 per cent. Demand dropped 1.9 per cent for jet fuel as the demise of Jet Airways limited growth in air traffic. Demand for bitumen, used mainly for building roads, was unchanged in nine months to December.
It dropped 8.4 per cent in December. “Road construction projects and other infrastructure activities lost pace due to severe winter in the northern states and agitation in some states,” the report said.