File photo of a petrol pump
File photo of a petrol pump|NetIndian
Business & Economy

Petroleum products demand gradually moving towards ‘near normal’, says Ministry

NetIndian News Network

New Delhi, July 2, 2020

India’s overall petroleum products consumption, which had nosedived in last week of March and April this year, is now steadily getting to its pre-lockdown levels in June, as emanating from the sales figures of public sector undertakings such as Indian Oil, Bharat Petroleum and Hindustan Petroleum.

The sales of petroleum products in India, the world’s third-biggest oil consuming nation, had fallen to the lowest since 2007, due to the nationwide lockdown, necessitated to prevent the spread of COVID-19 pandemic.

With the gradual lifting of lockdowns and beginning of unlocking of the economy in a phased manner, allowing resumption of industrial activity and movement of people, total petroleum products consumption has reached 88% in June (11.8 MMT) compared to June 2019 (13.4 MMT), indicating the increase in production, industrial and transportation activities, across all segments of the economic spectrum, a press release from the Ministry of Petroleum & Natural Gas said.

Demand of industrial fuels such as Sulphur, Petcoke and Naphtha reached levels of 89.3%, 118% and 80.7%, respectively, while marine fuels reached a level of 138.5% compared to the corresponding period last year.

The crude oil throughput of refineries of the oil marketing companies (OMCs) has already crossed 85% as on date, from as low as of 55% in the beginning of April.

On industry basis, in June, petrol consumption has reached 85% of last year's level (2.0 MMT in June ’20 vs 2.4 MMT in June ’19) and diesel at 82% (5.5 MMT in June ’20 vs 6.7 MMT in June ’19) compared to last year's level.

With timely arrival of monsoon and pick-up in agricultural activities during Kharif season, there was a marked acceleration in diesel consumption and it gained 96% on April ’20 level volume (5.5 MMT in June ’20 from 2.8 MMT in Apr ’20).

Demand for the LPG continues to rise, with robust growth of 16.6% in June ’20 over June ’19.

With opening of aviation sector domestically with 33% capacity and repatriation flights under the Vande Bharat Mission for international passengers, ATF consumption registered four times volume increases from April ’20 level (~ 52 TMT in Apr ’20 vs 201 TMT in Jun ’20).

Similarly, with the restart of major road construction projects, bitumen consumption has registered a growth of 32% in June ’20 compared to June ’19, the release said.

Overall, the consumption of all petroleum products has significantly increased from April ’20 level of 49% (6.6 MMT in Apr ’20 vs 13.4 MMT in Apr ’19) to 88% level in June ’20 (11.8 MMT in June ’20 vs 13.4 MMT in June ’19), as this comes in the backdrop of Indian economy gradually gathering momentum with the ease of lockdown restrictions and revival of economic activities that are slowly getting back on track, the release added.