Speculation of an eminent price hike pushed diesel sale by about 11% in May, propelling overall fuel sales to grow by a healthy 5%, according to the government data.
Diesel sale in May rose 10.9% to 5.294 million tonne because of "constant speculation throughout the month on price increase of diesel that promoted dealers to keep inventories high, which in turn resulted in higher sales," an oil ministry analysis of the sales data said.
While there were speculations since May 11 about the fuel price increase, the government had only on June 24 hiked diesel price by Rs 3 per litre, equalling the previous high of June 2008. Along with diesel, price of kerosene was raised by Rs 2 per litre and that of domestic LPG by Rs 50 per cylinder.
Overall, fuel consumption was up 5% at 12.316 million tonne on May. LPG sales was up 12.8% to 1.07 million tonne while petrol demand soared 8% to 1.251 million tonne.
The increase in petrol consumption was lower than near double digit growth recorded in the previous months.
"The impact of rising petrol retail price is quite visible in the consumption trend now. Recent price hike of Rs 5 per litre on May 14 is expected to further impact consumption in coming months," the analysis said. "High food inflation is impacting family budgets and leaving less money for other expenditure including spending on fuel," it added.
India imported 1.8% more crude oil in May at 13.396 million tonne while export of petroleum products jumped 30.5% to 3.951 million tonne.
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Domestic crude oil production rose 9.6% at 3.23 million tonne, the 18th straight month showing rise in output.
While Oil and Natural Gas Corporation (ONGC) reported a 1.7% drop in output at 1.989 million tonne, Cairn India boosted a near 11-fold increase in production from its Rajasthan oilfields at 540,900 tonne. Oil India too reported a 41% surge in output at 323,800 tonne.
ONGC's Mumbai High fields produced 1.355 million tonne, a decline of 3.3%.
The nation's natural gas output fell for the sixth straight month, declining 9.6% to 4.14 billion cubic metres, according to the data.
The fall has been mainly because of a drop in output at Reliance Industries' eastern offshore KG-D6 fields which is producing around 48 million standard cubic metres per day as against close to 60 mmscmd a year ago.
Refineries processed 14.378 million tonnes of crude oil in May, 4.5% higher than 13.753 million tonne in the same month last year.
Indian Oil Corporation and other public sector refiners produced 8.7% more fuel from their refineries at 10.188 million tonne while Reliance saw 5.7% drop in crude processing at 2.94 million tonne. Essar Oil too saw a 1.2% drop in fuel production at its Vadinar refinery in Gujarat at 1.24 million tonne.