India: Fuel demand reined in by COVID curbs in Jan 22

  • India’s fuel consumption fell in Jan 22 after scaling a nine-month peak in Dec 22, government data showed, as COVID-19 curbs in several states hit mobility and industrial activity.
  • Fuel consumption in the world’s third biggest oil consumer, a proxy for oil demand, totalled 17.61 million tonnes, down 3.7% m/m from Dec 21 and 0.2% y/y, data from the oil ministry’s Petroleum Planning and Analysis Cell showed.
  • Consumption of diesel, which accounts for about 40% of India’s refined fuel sales, fell 12.8% m/m to 6.37 million tonnes. Diesel sales were down 6.4% y/y. Sales of gasoline, or petrol, declined by about 12.2% m/m to 2.47 million tonnes, and was down 5.3% y/y.
  • “After relatively strong recovery during the festive season, recovery is taking a respite. Recent surge in COVID-19 cases should have played a role in limiting demand,” Refinitiv analyst Ehsan Ul Haq said.
  • “While high oil prices are a drag on demand recovery, car sales have also not picked up as much as expected. However, India’s economy looks very strong and this will also lead to higher demand in the next few months.”

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