Higher LPG usage drives petroleum products consumption in Nov

Consumption of petroleum products in the country has shown a 5 per cent rebound in November after a 0.8 per cent decline in the previous month. The growth in consumption was driven mainly by a 15 per cent rise in LPG usage in November and a cumulative growth of 11 per cent during April-November 2014 as compared to a growth of 7.7 per cent in November 2013 and 1.7 per cent growth during April-November 2013. 

The increased LPG consumption is mainly due to release of 94.27 lakh new connections and 58.44 lakh Double Bottle Connections (DBCs) in the first eight months of the current financial year and increase in the capping of subsidized cylinders since February 2014. “The high growth in November 2014 can also be attributed to consumers picking up their quota of subsidized cylinders before nationwide launch of Direct Benefits Transfer of LPG (DBTL) from January 2015,” the petroleum ministry said.

Subsidized LPG sales, that alone account for over 80 per cent of the sales of cooking gas, continued to grow for the ninth month in a row in November. Subsidized sales have grown by a staggering 26 per cent in the current financial year (April-November) as against a 2.5 per cent dip in sales in the same period last year. Further bolstering speculations of diversion of subsidized LPG for commercial usage, non-subsidized LPG consumption continued to register a decline for the eighth month in a row.

The growth in petrol consumption continued its downslide and landed at 3.6 per cent in November, down from 10.5 per cent in the previous month. “The anticipated downward revision in MS price during the entire month of November 2014 resulted in the dealers maintaining low inventory at retail outlets,” the ministry said. Petrol prices were reduced on 15 November by Rs 1.28 per liter and were further reduced on 1 December by Rs 0.93 per liter.

Diesel consumption growth, after remaining in the negative territory for two months in September and October, landed at 3 per cent in November. This was mainly because Commercial Vehicle (CV) sales, which are considered a barometer of the economy, grew by over 9 per cent in November. Diesel sales were also pushed by a 10.3 per cent growth in port traffic last month.