Fuel Sales In India Slump Due To Monsoon Rains In First Half Of August

State-run fuel retailers sold 1.19 million metric tons of gasoline in the first half of August, down 5.2 per cent from the same period in July and by 8 per cent from a year earlier

Petrol and diesel sales across India dropped in the first half of August from the previous month and a year ago as industrial activity and mobility was hit due to monsoon rains, news agency Reuters said on Wednesday quoting a preliminary sales data. According to the report, fuel demand in India, the world's third-biggest oil importer and consumer, typically falls during the four-month monsoon season beginning in June as parts of the country are affected by heavy floods.

State-run fuel retailers sold 1.19 million metric tons of gasoline in the first half of August, down 5.2 per cent from the same period in July and by 8 per cent from a year earlier, the data showed. Sale of diesel, mainly used by trucks and other commercial vehicles, declined by 9.5 per cent from the previous month and 5.7 per cent from a year ago to about 2.68 million tons in the first half of August, the data showed.

Monsoon rains also hit demand from the agriculture sector as farmers use gasoil-fired generators for irrigation. Diesel sales of state fuel retailers were also affected due to marginally lower prices of the fuel at outlets of private refiners. Petrol accounts for about two-fifths of India's overall refined fuel consumption and is directly linked to industrial activity in Asia's third-largest economy.

Indian Oil Corp, Hindustan Petroleum Corp Ltd, and Bharat Petroleum Corp Ltd own about 90 per cent of the country's retail fuel outlets.

Meanwhile, the central government on Monday increased the special edition excise duty on crude petroleum to Rs 7,100 per tonne with effect from August 15. The windfall tax on domestically produced crude oil was set at Rs 4,250 per tonne in the last fortnightly review, as per a PTI report. The Special Additional Excise Duty (SAED) or duty on export of diesel will also be hiked to Rs 5.50 per litre from Re 1 per litre at present, the report added.

ATF will invite a duty of Rs 2 per litre with effect from August 15. Currently, there is no SEAD on the jet fuel while SAED on petrol will continue to be zero.

Earlier this month on August 1, the Centre had increased windfall tax on domestic crude oil. Special Additional Excise Duty (SAED) on crude petroleum was increased from Rs 1,600/tonne to Rs 4,250/tonne. SAED on diesel had been hiked from Nil/litre to Rs 1/litre.