If diesel consumption trends are any indication, the country's economy continues to be sluggish.
The continuing slowdown in the economy has forced the government to lower its estimates of diesel demand during the current financial year from 39.4 million tonne as projected in the Oil Economy Budget (OEB) to 37.1 million tonne.
Diesel consumption has seen a downtrend from the beginning of the current financial year.
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In April this year, the consumption was 3.16 million tonne against 3.3 million tonne during the corresponding month of last year.
Similarly, diesel consumption during May 2001 was 3.4 million tonne (3.55 million tonne in May 2000), 3.22 million tonne in June 2001 (3.28 million tonne), 2.85 million tonne in July 2001 (3.06 million tonne), 2.73 million tonne in August 2001 (2.88 million tonne), and 2.98 million tonne in September 2001 (3.3 million tonne).
At 37.1 million tonne, diesel consumption in the country during 2001-02 will be 2 per cent lower than even last year's consumption of 37.2 million tonne.
Even during 1998-99 and 1999-2000, diesel consumption at 37.2 million tonne and 39.29 million tonne was higher than the projected consumption this year.
Though compressed natural gas (CNG) and liquefied petroleum gas (LPG) have replaced diesel to some extent, the replacement would be only of the order of 22,000 tonne and 13,000 tonne respectively, petroleum ministry officials say.
Moreover, under normal circumstances, diesel consumption in the country should have gone up because of the expected four per cent increase in the population of trucks, tractors and buses on Indian roads, the officials point out.
Besides CNG and LPG replacing diesel in certain uses, the other factors that contributed to the fall in diesel consumption include shift of goods traffic from road to rail, more goods moving through containers, use of high capacity trucks, and a change in crop pattern from paddy to cotton, especially in the north.
Some other reasons for the drop in diesel consumption include drought in certain parts of the country, increased availability of white kerosene, slowdown in cement, machinery and chemical industries and slackness in construction activities, petroleum ministry sources said.
Officials in the Oil Coordination Committee (OCC) also stress that the lower consumption of diesel is the result of a marked decline in its demand by the industry.
"The slowdown in the economy became more pronounced after the September 11 terrorist attacks on the US and the subsequent US attack on Afghanistan," the officials said.
The consumption of light diesel oil (LDO), which is widely used for various industrial purposes, has also registered a decline.
The LDO consumption during the current financial year is expected to be around 1.38 million tonne against 1.4 million tonne in 2000-01 and 1.5 million tonne in 1999-2000.