46% Decline Registered in India’s Fuel Consumption in April 2020

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Due to nationwide strict lockdown, India’s fuel consumption fell almost 46 per cent in April as all petroleum products, except LPG, saw massive demand erosion following the nationwide lockdown that halted economic activity and travel. This has a huge impact on India’s oil and gas market and this impact is not just immediate but also going to last for a couple of quarters.

The demand, which showed signs of pick up in the last 10 days of April after the government allowed resumption of economic activity beyond the urban municipal limit, is likely to rebound in second half of May as more areas are opened.

Fuel consumption during March, when travel restrictions began to be imposed to curb the spread of coronavirus, stood at 16.08 million tonnes.

Petrol sales were down 60.43 per cent to 9,73,000 tonnes in April. The demand for the fuel had fallen 64 per cent in first half of the month, but there was some pick up in sales after reopening of some offices brought few more vehicles back on road.

Diesel, the most consumed fuel in the country, slumped 61 per cent in the first half of April, but ended the month with a 55.6 per cent fall in sales at 3.25 million tonnes.

The data released includes sales by both public and private sector firms. Previously only public sector data was available.

Aviation turbine fuel (ATF) consumption collapsed by 91.3 per cent to 56,000 tonnes 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 12.2 per cent to 2.13 million tonnes in April, the data showed.

Oil Minister Dharmendra Pradhan had last week stated that demand is likely to rebound to near normal level in second half of May after more economic activity is allowed.

The demand, he had said, had seen a small pick up after economic activity was allowed in rural areas in the later half of April.

From May 4, more areas were opened and work resumed at a lot of offices and factories. Further relaxations are expected when the lockdown 3.0 ends on May 17.

Naphtha consumption fell 9.5 per cent to 8,59,000 tonnes in April, while fuel oil sales were down 40 per cent at 2,97,000 tonnes.

Bitumen, which is used in road construction, saw 71.6 per cent fall in sales at 1,96,000 tonnes. Petroleum coke sales almost halved to 1.13 million tonnes.

Prime Minister Narendra Modi had announced a 21-day lockdown beginning March 25, 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 May 3 and then till May 17.

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

From May 4, 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.

SMEStreet Desk

SMEStreet is fast growing platform dedicated to entrepreneurs from small and medium sized businesses (SMEs). Committed to facilitate Knowledge & Networking for Business Growth, SMEStreet offers value added content which shows the actual voice of Indian MSMEs.

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