India’s fuel demand in July hits 3-month peak

A worker holds a nozzle to pump gasoline into a vehicle at a gas station in Mumbai, India on May 21, 2018. REUTERS / Francis Mascarenhas / File Photo

  • Natixis anticipates a seasonal acceleration in demand in Q4
  • Demand for diesel increased 11.5% year on year
  • Gasoline sales up about 16.4% year-on-year

Aug 10 (Reuters) – Fuel demand in India rose in July to its highest level since April, as restrictions and pandemic lockdowns were lifted in most states, boosting industrial activity and mobility .

Fuel consumption, an indicator of oil demand, amounted to 16.83 million tonnes, up 2.9% from June and 7.9% from the same period ago one year, the data on website of the Petroleum Planning and Analysis Unit (PPAC) showed on Monday.

Consumption fell in May to its lowest level since August, when a deadly second wave of COVID-19 resulted in shutdowns in most Indian states. But most restrictions were eased in June and more in July, causing demand to pick up. Read more

“We expect consumption to remain stable for another month and then accelerate seasonally in the fourth quarter, which we estimate is expected to be an increase from pre-pandemic levels,” said Joel Hancock, Natixis commodities strategist.

Hancock, however, expects high domestic prices for gasoline and diesel to limit the recovery.

“There will be an impact of higher prices on consumption, but the broader trend of pandemic recovery will prevail – so we will still have growth on an annual basis and compared to 2019.”

Consumption of diesel, which accounts for around 40% of India’s refined fuel sales, increased 11.5% year-on-year to 6.14 million tonnes, but was down 1% from the previous month .

Sales of gasoline, or gasoline, increased about 16.4% to 2.63 million tonnes on an annual basis and increased 9.2% from June.

Sales of cooking gas, or liquefied petroleum gas (LPG), increased 4.6% to 2.37 million tonnes, while sales of naphtha fell about 5.3% to 1.21 million tons.

Sales of bitumen, used for road construction, increased 4.1%, while sales of fuel oil declined 5.1%.

Reporting by Nakul Iyer in Bengaluru Editing by Richard Chang and Mark Potter

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