Indian May 21 fuel demand hits 9-month low as COVID stalls activity

• India’s fuel demand slumped in May 21 to its lowest since Aug 20 with a second COVID-19 wave stalling mobility and muting economic activity in the world’s third largest oil consumer.
• Oil demand fell 11.3% m/m and was down 1.5% y/y, data from the Petroleum Planning and Analysis Cell (PPAC) of the Oil Ministry showed on 9 Jun 21.
• “It’s primarily because of the lockdowns, but it’s very difficult to isolate the impact on demand as even high oil prices could sort of pinch a little bit in terms of demand recovering more slowly,” said Prashant Vashist, Vice President and Co-Group head at ICRA.
• Indian state refiners’ daily gasoline and gasoil sales declined by about a fifth m/m in May 21 due to the pandemic, but higher fuel prices have also sapped consumption.
• The country’s total coronavirus infections crossed 27 million and hit record daily levels in May 21, putting the government “on a war footing” to contain the spread.
• However, as cases decline, parts of the country are expected to ease movement restrictions, which could boost demand.
• Diesel consumption, a key parameter linked to economic growth and which accounts for about 40% of overall refined fuel sales in India, rose 0.7% y/y, but dipped 17% m/m.
• Likewise, sales of gasoline, or petrol, increased by 12.4% y/y, but fell about 17% m/m.
• On the flipside, India’s natural gas consumption is recovering in Jun 21 after declining in the previous two months, as states ease restrictions in the wake of a drop in coronavirus infections, officials said on 9 Jun 21.
• “In the Indian market there was some slowdown, but the situation is not as bad as 2020,” Manoj Jain, chairman of GAIL (India), the country’s biggest gas pipeline operator, said at a news briefing to announce quarterly results.
• He said gas consumption in Apr 21 and May 21 fell by about 10% to 15% compared to a 50% reduction in 2020 when there was a nationwide lockdown to stem the spread of the virus.
• Gas consumption has returned to its normal level in the last week, Jain said, indicating that the company has now achieved a pre-pandemic operational level of operations.
• Petronet LNG, the country’s top gas importer, is operating its 17.5 million tonne-per-year Dahej terminal in western Gujarat state at 87% capacity, its chief executive, A.K. Singh, said at a separate news briefing.
• The company was operating India’s biggest LNG import plant at about 80% capacity in Apr 21 and May 21, he said, adding that higher spot prices of liquefied natural gas (LNG) and pandemic-induced lockdowns in states had dented gas demand in the last two months.

External Link : https://www.reuters.com/business/energy/indian-may-fuel-demand-hits-9-month-low-covid-19-stalls-activity-2021-06-09/

External Link : https://www.reuters.com/world/india/indias-natural-gas-consumption-starts-rebound-june-2021-06-09/