In June, India experienced a decline in diesel demand due to severe heat conditions in certain regions, according to data from state-owned enterprises released on Monday. Sales of fuel typically boosted during election periods, have bucked this trend by decreasing consistently month after month this year. And this decline has persisted even after the conclusion of the general elections.
In the first half of June, petrol sales from three state-owned firms, which collectively dominate 90 per cent of the fuel market, accounted for 1.42 million tonnes, nearly identical to the 1.41 million tonnes consumed in the corresponding period last year. However, consumption decreased by 4.6 per cent compared to the previous month.
Diesel sales declined by 3.9 per cent to 3.95 million tonnes in the first half of June compared to the same period last year. This follows a 2.3 per cent drop in April, a 2.7 per cent decline in March, and a 1.1 per cent decrease in May, reflecting a consistent downward trend in demand for India's most consumed fuel.
Despite expectations driven by election activities and the summer harvest season, as well as increased demand for car air conditioning due to scorching temperatures, fuel consumption this year has yet to follow the usual upward trajectory. In mid-March, both petrol and diesel prices were reduced by Rs 2 per litre, marking the end of nearly two years without rate revisions, which typically stimulates sales.
However, month-on-month data shows petrol sales decreased by 3.6 per cent compared to 1.47 million tonnes consumed during May 1-15, while diesel demand remained steady with 3.54 million tonnes consumed in the first half of May.
Diesel is India's most consumed fuel, constituting nearly 40 per cent of total petroleum product consumption. The transport sector alone contributes 70 per cent to diesel sales in the country, and diesel is also used as the primary fuel in agricultural activities, including harvesters and tractors.
During June 1-15, petrol consumption registered a decline of 4.6 per cent compared to the same period in June 2022, yet showed a notable increase of 28.1 per cent compared to the Covid-affected period of 2020. Conversely, diesel demand experienced a significant drop of 10.5 per cent over June 1-15, 2022, but exhibited a 14 per cent rise compared to the same period in 2020.
During June 1-15, 2024, sales of aviation turbine fuel (ATF) increased by 2.3 per cent year-on-year, amounting to 331,000 tonnes. However, this represented a 4.5 per cent decline compared to the 346,500 tonnes sold during May 1-15 of the same year. Similar to petrol and diesel, the demand for ATF has now surpassed pre-Covid levels.
According to the data, ATF consumption from June 1 to 15, 2024, was 10.1 per cent higher than in 2022 and showed a 6.1 per cent increase compared to June 1-15, 2020.
SLiquefiedpetroleum gas (LPG) sales reached 1.24 million tonnes during June 1-15, 2024, marking a marginal year-on-year growth of 0.1 per cent. However, LPG consumption declined by 0.9 per cent compared to June 1-15, 2022, while it saw a substantial 32 per cent increase over the same period in 2020.
As per the data, LPG demand dropped by 5.2 per cent from May 1-15, when consumption stood at 1.3 million tonnes.