Hit by the industrial slowdown, consumption of petroleum products has witnessed its lowest monthly growth in the current year and one of the lowest in recent years, shows a preliminary data.
Overall, sales during February is estimated to have grown close to 2.5 per cent over the corresponding month last year. LPG sales have dipped by over 1 per cent (the first dip in the year), while aviation turbine fuel (ATF) has declined a sharp 9 per cent.
“The February growth has been lowest in recent times, primarily on account of the slowdown in industrial activity. ATF sales declined by about 9 per cent, while diesel growth has tapered off to 4 per cent,” said GC Daga, director (marketing) at the Indian Oil Corporation, the country’s largest oil marketer. While diesel sales dipped due to a slump in manufacturing activity, ATF decline was on account of curtailed flight operations.
Petrol has seen a healthy growth of over 14 per cent and it will get a further boost due to the general elections, he added.
The cumulative growth for the April-February period is still marginally above 4 per cent (though significantly lower than the 6.8 per cent growth achieved in the whole of 2007-08). This is because sales clocked a healthy growth in the first 6-7 months of the year.
Petroleum demand has slackened from sectors like automobile manufacturing, textiles and power plants.
For the first time in 16 years, India’s industrial production has seen a decline for two consecutive months. In December 2008, production declined 0.63 per cent, while in January the output dipped 0.5 per cent. The government has taken measures like lowering tax rates to drive consumer spending, while the Reserve Bank of India has been taking steps to infuse liquidity into the economy. However, not much impact has been seen.
The Organisation of Petroleum Exporting Countries (Opec) estimates that crude oil demand in 2009 will decline by 1.18 per cent to 84.61 million barrels/day. The revisions take into account continued deterioration in the world economy and the accompanying erosion in demand growth. Opec expects a decline across all regions, except West Asia and China.
