Petrol and diesel sales in India during the first half of July declined from last month, as reported by Bloomberg on Monday. According to the report, fuel sales dropped as seasonal rains curtailed demand in India, world’s third-biggest energy consumer, which could help keep a lid on oil prices.
India’s three biggest retailers sold 1.28 million tons of gasoline during July 1-15, down about 8 per cent from the corresponding period in June, according to refinery officials with knowledge of the matter. Diesel sales tanked almost 14 per cent from last month, sources told Bloomberg.
The Bloomberg report stated that spokespersons at the three Indian retailers, Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL), and Hindustan Petroleum Corp (HPCL) couldn’t immediately comment. The companies together account for over 90 per cent of Indian fuel sales.
The retracement in India’s fuel demand adds pressure on the price of oil amid rising pessimism about a global economic slowdown that dragged it below $100 a barrel for the first time since early April. The softening of demand could also add to a supply glut in the region that’s curtailing the profits from processing gasoline and diesel.
This is the first monthly decline in sales in three months after resurgent economic activity, summer travel, and increased use of diesel-fired generators during a severe heat-wave drove the South Asian nation’s fuel demand.
In India, fuel consumption typically declines during monsoon which lasts till September. It hampers trucking and construction activities, weighing on demand for diesel, the country’s most-used petroleum fuel.
According to data published by the India Meteorological Department (IMD) on Sunday, so far, India has received 13 per cent higher than normal rains during the current monsoon season. Sales of liquefied petroleum gas (LPG), a cooking fuel, rose 8.3 per cent from June, while aviation fuel fell 6.7 per cent.