Petrol and diesel sales shrink in April; demand expected to pick up this month

New Delhi: India's fuel consumption slumped by close to 70 percent in April as all petroleum products except LPG saw massive demand erosion following a nationwide lockdown halted economic activity and travel.

But demand has shown signs of pick up in the last 10 days of April after the government allowed resumption of economic activity beyond the urban municipal limit, industry data showed.

The demand is expected to further pick up as more areas were opened up on Monday.

According to provisional industry data, petrol sales by public sector firms were down 64 percent in the first half of April but ended the month with a 61 percent fall after some up trend in the second half. Similarly, diesel sales slumped 61 percent in the first half but ended with 56.5 percent lower sales for the month.

Overall, petrol sales came in at around 8,70,000 tonnes in April, down from 2.23 million tonnes in the same month a year back. Diesel consumption was down to 2.84 million tonnes from 6.56 million tonnes in April 2019.

Aviation turbine fuel (ATF) consumption collapsed by 91.5 percent as most airlines have stopped flying.

The only fuel that showed growth was LPG as the government dole of free cooking gas cylinders to poor households fired up consumption by 12 percent to 2.11 million tonnes in April, the data showed.

Overall the decline in petroleum product sales was about 70 percent.

The data pertains to sales made by three public sector (PSU) oil marketing companies.

Oil Minister Dharmendra Pradhan, in a Facebook talk on mitigating challenges in times of Covid-19, said globally oil demand has evaporated due to lockdowns imposed to curb the spread of coronavirus. "This is an unprecedented situation in the energy sector. Such a situation hasn't been witnessed ever before".

"India has also seen petrol, diesel and ATF demand crashing. Overall demand has fallen by about 70 percent," he said.

He, however, said there has been a pick up after economic activity was allowed in rural areas in the later half of April.

And from Monday, more areas have been opened and work resuming at a lot of offices and factories. "We will see a pick up (in demand)," he said.

Prime Minister Narendra Modi had announced a 21-day lockdown beginning 25 March, shutting offices and factories, barring those involved in essential services. Also, flights were suspended, trains stopped plying, vehicles went off the road and cargo movement stopped as most people were asked to stay home to help check the spread of coronavirus.

The lockdown was first extended till 3 May and now till 17 May.

But the government had allowed trucks to ply as well as farmers and industries in rural areas to resume operations after 20 April.

From Monday, restrictions were further eased, allowing offices to reopen with reduced attendance. Cabs and buses have even been allowed in areas that have seen a lesser number of COVID-19 cases, called the Green Zone. Also, some restrictions on e-commerce companies have been lifted, all of which will add to fuel consumption.