Fuel demand climbs for 3rd straight month in November over renewed activity

By Sumita Layek and Koustav Samanta

(Reuters) - India's fuel consumption rose for a third straight month in November, helped by reviving transportation and business activity, although a year-on-year fall pointed to a sluggish economic recovery.

Consumption of refined fuels, a proxy for oil demand, in November rose 0.4% from the previous month to 17.83 million tonnes, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas released on Saturday showed.

Diesel consumption, a key parameter linked to economic growth and which accounts for about 40% of overall refined fuel sales in India, edged up 0.6% month-on-month, but fell 7% to 7.04 million tonnes on an annual basis.

Gasoil consumption in India, which has been one of the primary drivers for Asian demand for the fuel in recent weeks, alongside steady growth in overall fuel sales, has prompted the country's refiners to ramp up capacity.

"For Asia Pacific gasoil/diesel demand, recovery is accelerating in Q4 2020, driven mainly by India as the country now enters high seasonal gasoil/diesel demand period," said WoodMac research associate Qiaoling Chen.

Sales of gasoline, or petrol, rose by 0.4% from October and 5.1% from a year earlier to 2.66 million tonnes.

India's daily coronavirus cases have declined steadily, although the country has the world's second-highest number of infections with more than 9.8 million cases.

Total fuel demand fell 3.7% on year after registering its first year-on-year increase since February in October, as manufacturing and services slowed with consumers staying indoors to avoid getting infected by the novel coronavirus.

Cooking gas, or liquefied petroleum gas (LPG), sales increased by about 4% to 2.35 million tonnes from a year earlier, but fell 2.9% from the previous month, while naphtha sales rose by 7.2% to 1.34 million tonnes year-on-year.

Sales of bitumen, used for making roads, were up about 19% on year, while those of fuel oil increased by about 8.7%.

 

(Reporting by Sumita Layek in Bengaluru and Koustav Samanta in Singapore, additional reporting by Eileen Soreng; Editing by Subhranshu Sahu)