Surge In Agricultural Demands Increases Fuel Sales In India

The rise in fuel sales in April is attributed to the pick-up in industrial and agricultural activities. The growth was particularly strong for diesel, which is used extensively in agriculture for tractors and harvesters.

India's fuel sales increased in April, driven by a surge in demand for diesel on the back of a pick-up in the harvesting of Rabi crops and the expansion of economic activity, according to preliminary industry data. Diesel demand, which accounts for around 40% of India's fuel consumption, surged 6.7% to 7.15 million tonnes in April compared to the same period last year.

Petrol sales rose by about 2.5% to 2.64 million tonnes in April but fell marginally by 0.5% month-on-month. Jet fuel (ATF) demand jumped 15.4% to 595,600 tonnes during April compared to the same period last year, while cooking gas LPG sales fell 2.7% year-on-year to 2.19 million tonnes in April.

The rise in fuel sales in April is attributed to the pick-up in industrial and agricultural activities. The growth was particularly strong for diesel, which is used extensively in agriculture for tractors and harvesters during the harvesting of Rabi crops, including wheat, barley, mustard, sesame and peas, which are sown between October and December and harvested from April to June.

According to industry officials, the services and industrial sectors are supporting India's steady economic growth. Diesel was the main driver of oil demand in April, owing to the pick-up in the agriculture sector and requirements for power generation and industry. The use of the fuel in irrigation pumps and trucking also supported diesel demand.

With the continued opening of the aviation sector, India's overall passenger traffic at airports is inching closer to pre-COVID levels, reflected by the 15.4% jump in jet fuel demand in April. However, month-on-month sales fell 3.1% when compared to March 2023.

Cooking gas LPG sales fell 2.7% year-on-year to 2.19 million tonnes in April, but consumption was 4% higher than in April 2021 and 16% higher than pre-COVID April 2019. Month-on-month, the demand for cooking gas dropped 8.1% compared to March.

Source-Outlook India

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