Petrol, diesel sales surge in Dec as economy picks up momentum, shows data

India’s petrol and diesel demand soared in December as increased consumption in agriculture sector helped build on the momentum generated by the festive season, preliminary industry data showed on Sunday.

Petrol sales soared 8.6 per cent to 2.76 million tonnes in December, as compared to 2.54 million tonnes of consumption in the same month last year.

Sales were 13.3 per cent higher than in COVID-marred December 2020 and 23.2 per cent more than in pre-pandemic December 2019.

Month-on-month, the demand was up 3.7 per cent on the high base festive season created since October.

Diesel, the most used fuel in the country, posted a 13 per cent rise in sales in December to 7.3 million tonnes, as compared to the same month last year.

Consumption was up 14.8 per cent over December 2020 and 11.3 per cent higher than pre-COVID 2019.

Diesel sales, however, dipped marginally by 0.5 per cent when compared with November 2022.

Petrol and diesel sales were the highest since June.

Industry sources said diesel demand has been surging on pick up in the agriculture sector. Use of the fuel in irrigation pumps and trucking has helped build the momentum generated from the festive season demand push in October. Rabi crop sowing led to a pick-up in economic activity and a rise in demand.

Auto fuel sales had dipped in July and August owing to the monsoon and reduced demand.

As the aviation sector opened up, India’s overall passenger traffic at airports inched closer to pre-COVID-19 levels.

Reflecting the trend, jet fuel (ATF) demand jumped 18 per cent to 606,000 tonnes during December when compared to the same month last year. It was 50.6 per cent higher than December 2020 but 12.1 per cent lower than pre-COVID December 2019.

Sources said while domestic air travel is back to pre-COVID levels, international traffic is lagging because of continued restrictions in some countries.

India’s recovery has continued to gain momentum in recent months but has been accompanied by elevated inflation. This slowed the momentum a bit in July-September. The country’s oil demand has been rising steadily since the easing of COVID-19 restrictions.

Cooking gas LPG sales were up 7.7 per cent year-on-year at 2.72 million tonnes in December. LPG consumption was 7.7 per cent higher than in December 2020 and 15.9 per cent more than in December 2019.

Month-on-month, the demand was up 6.47 per cent when compared to 2.55 million tonnes of LPG consumption during November, the data showed.

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