Petrol sales down 36.5%, diesel down 31% in May; improves from April

New Delhi: Fuel sales recovery gathered momentum in May as the easing of lockdown brought more people out of their homes and restarted factories.

Diesel sales fell 31% year on year in May compared with a 56% slump in April while petrol consumption declined 36.5% in May as against a 60% decline in April. May data is for sales by state companies, which control about 90% of the fuel market.

Fuel sales witnessed a record fall in April and the gradual comeback in May signals a change in economic sentiment.

“It’s getting better. We are coming back on rails,” said an industry executive. “Increased sales in petrol and diesel are a pointer towards improving economic activity.”

“Sales will further get a boost in June as lockdown curbs have been eased and economic activity is picking up,” he said.

Jet fuel sales also improved from April as the government permitted airlines to resume passenger flights towards the end of May. The volume is still low as very few flights are currently operational. Jet fuel sales dropped 85% in May from a year earlier compared to a 91% drop in April.

Improvement in jet fuel sales will depend on how airlines add flights, the executive said.

The sale of liquefied petroleum gas (LPG), or cooking gas, barely changed from April. In April, the LPG sales jumped 13% year on year compared to a 12.2% rise in April.

With restaurants and malls set to open in June, LPG demand is likely to rise further. Opening of inter-state transport and an expected increase in attendance at offices and factories will likely push up demand for transportation fuels in June.

Rising demand for fuels is boosting refinery run rate. Capacity utilization at Indian Oil Corp, the largest refiner in the country, has risen to more than 75% from 45% in April.


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