Agricultural Demand Drives An Increase In Diesel Sales

Preliminary industry data released on Monday indicated a sharp increase in diesel sales in India during the first half of April, driven by a resurgence in agricultural activity and trucking to meet growing industrial demand. Diesel is the most widely consumed fuel in the country, representing around 40% of total demand. Compared to the same period last year, demand for diesel surged by over 15%, reaching 3.45 million tonnes. 

On a monthly basis, sales also rose by 8.4% compared to the first half of March, which had experienced a seasonal slowdown.

According to data, the sales of petrol increased by approximately 2% to 1.14 million tonnes from April 1 to 15, when compared to the same period last year. 

However, sales witnessed a decline of 6.6% when compared to the previous month. In the first half of March, there was a decline of 1.4% in petrol sales and 10.2% in diesel sales, in comparison to the same period the previous year.

During the first half of April, the consumption of petrol was 14.6% more than in the same period in the previous year, which was greatly affected by the COVID-19 pandemic. 

Moreover, it was nearly 128% more than in the same period in 2020. Similarly, diesel consumption rose by 24.3% from April 1 to 15, 2021, and was 127% higher than in the same month of the previous year.

India's overall passenger traffic at airports has gradually improved, indicating a step closer to the pre-COVID levels due to the continued reopening of the aviation sector.

During the first half of April, the demand for jet fuel (ATF) increased by 14% to reach 2,84,600 tonnes, compared to the same period last year. This represents a significant growth of 35% when compared to the period of April 1-15, 2021, and a whopping increase of 467.6% when compared to the same period in 2020. However, sales dropped by 3.8% on a month-on-month basis.

India's economy is experiencing steady growth, supported by both the services and industrial sectors. The oil demand in the country has been boosted by strong industrial activity, according to industry officials.

Diesel has been the primary driver of oil demand, as there was a surge in the agriculture sector and an increased demand for power generation and industrial purposes. The use of diesel in irrigation pumps and trucks also contributed to the rise in demand.

According to recent data, sales of cooking gas LPG increased by 5.7% year-on-year, reaching 1.1 million tonnes in the first half of April. Furthermore, LPG consumption during this period was 7% higher compared to the same period in 2021, and 9.2% higher than the first half of April 2020.

However, there was a month-on-month decline in demand, with a drop of 6.37% when compared to the 1.18 million tonnes of LPG consumption reported during March 1-15.

-PTI

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