Petrol, diesel demand slumps 66%; ATF down 90% as lockdown hurts business

Demand for petrol and diesel is down 66 per cent in April, while aviation turbine fuel (ATF) consumption has collapsed by 90 per cent as most airlines have stopped flying, industry officials said. India's fuel consumption slumped as a nationwide lockdown halted economic activity and travel, which eviscerated demand.

In April 2019, India had consumed 2.4 million tonnes of petrol and 7.3 million tonnes of diesel. As much as 6,45,000 tonnes of ATF was used during the same time last year.

The collapse of demand in the world's third-biggest consumer during April comes on the back of worst fuel sales in more than a decade recorded in March 2020.

The country's petroleum product consumption fell 17.79 per cent to 16.08 million tonnes in March as diesel, petrol and ATF demand fell, according to official data released.

Diesel, the most consumed fuel in the country, saw demand contract by 24.23 per cent to 5.65 million tonnes. This is the biggest fall in diesel consumption the country has recorded as most trucks went off-road and railways stopped plying trains.

Petrol sales dropped 16.37 per cent to 2.15 million tonnes in March as the 21-day nationwide lockdown enforced to prevent the spread of COVID-19 took most cars and two-wheelers off the road.

With flights grounded since mid-March, ATF consumption fell 32.4 per cent to 4,84,000 tonnes.

The only fuel that showed growth was LPG as households rushed to book refills for stocking during the three-week lockdown period.

LPG sales rose 1.9 per cent to 2.3 million tonnes in March.

This is the first estimate of total petroleum product consumption in the country. This includes sales by both public and private sector companies.

Previously, provisional numbers of the three public sector oil marketing companies -- Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) -- were released that also showed a 17 per cent drop in petrol and 26 per cent slump in diesel sales in March.

Industry officials said the pattern in fuel consumption is continuing in April as the lockdown is to last till mid of the month and there are indications that part restrictions will continue even after the lockdown is lifted.

Petrol and diesel sales in April are one-third of what they were a year ago, they said adding that demand is expected to pick up when the lockdown is lifted and restrictions on public transport lifted.

LPG sales in April is up 30 per cent, they said adding that these are provisional trends and actual numbers will only be known at the month-end.

Prime Minister Narendra Modi had announced a 21-day lockdown beginning March 25, shutting offices and factories, barring those involved in essential services. Also, flights were suspended, trains stopped plying, vehicles went off the road and cargo movement stopped as most people were asked to stay home to help check the spread of coronavirus.

March is the first month in two-and-a-half years when petrol sales have seen a negative or de-growth.

Naphtha consumption in March was up 15.7 per cent to 1.38 million tonnes, possibly because of its increased use in power plants. But, other industrial fuels such as fuel oil posted a 10.4 per cent drop to 4,82,000 tonnes.

Bitumen, used in road construction, saw a 41 per cent drop in consumption to 5,25,000 tonnes.

In the full 2019-20 fiscal (April 2019 to March 2020), petroleum product consumption was almost unchanged at 213.68 million tonnes as compared to 213.21 million tonnes of fuel consumed in the previous 2018-19.

LPG consumption saw a 5.8 per cent rise to 26.3 million tonnes, while petrol sales were up 5.9 per cent to 29.97 million tonnes.

ATF sales slipped 3.6 per cent to 8 million tonnes and diesel consumption was down 1.1 per cent at 82.6 million tonnes.

Diesel sales had shown modest growth in April 2019 to February 2020.

Plunging fuel demand has OMCs worried on all fronts

National oil companies are staring at inventory losses as they have to bring down refinery throughputs because of the plunging demand for fuels following the nationwide lockdown to contain the deadly coronavirus infection.

India is the world's third-largest energy consumer but the Covid-19 lockdown has shut businesses, suspended flights, stopped trains and brought almost the entire vehicular movement to a halt, impacting fuel demand.

For the full the month of March, total retail volume has come down by 17 per cent, led by a 26 per cent dip in diesel demand and a 17 per cent fall in petrol and practically demand for aviation fuel is down 33 per cent, according to the national data shared by IOC on a year-on-year basis

The only fuel that saw a demand spike in the month was cooking gas that, too, after panic buying since the national lockdown. Overall, LPG demand rose 1.7 per cent in the month, according to the IOC data.

There are 27.59 crore active LPG customers in the country.