India's gasoil sales rise in Dec, but Omicron seen dampening demand

By Nidhi Verma

NEW DELHI (Reuters) - Indian state refiners' daily gasoil sales rose in December from the previous month but a rapid surge in infections due to the Omicron coronavirus variant could hit fuel demand in Asia's third largest economy.

State retailers sold about 208,150 tonnes of gasoil a day in December, up 8.75% from November and 1.48% higher than the same month last year, preliminary sales data compiled by the industry showed.

However, it represented a 1.60% decline versus December 2019, before the COVID-19 pandemic had spread globally.

Movement of gasoil-consuming trucks in India picked up in December as more fruits and vegetables were transported across the country than usual that month, while factory output and exports continued to grow, truckers association Indian Foundation of Transport Research & Training said in a statement.

But it added that the rapid spread of Omicron in India in the last few days of December had "initiated (a) sense of nervousness" in trade and commerce, which was beginning to impact the road transport business.

Gasoil accounts for about two-fifth of refined fuel consumption in India and is directly linked to industrial activity.

Industrial activity slowed in December but remained above the 50 mark that separates growth from contraction.

India's Manufacturing Purchasing Managers' Index, compiled and collected by IHS Markit Dec. 6-17, fell to 55.5 in December from November's 57.6 though it stayed above the 50 mark for a sixth month.

Daily gasoline sales rose 3.21% month-on-month to 81,950 tonnes in December as motorists preferred to use personal vehicles to protect against COVID.

State retailers - Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp - control about 90% of the fuel stations in the country.

India's jet fuel sales continued to rise in December from the previous month, but there are signs that growing travel restrictions to contain the spread of Omicron could hit jet fuel demand.

Asian refining margins for jet fuel plunged to a three-week low last week as airlines trimmed capacity amid surging Omicron infections.

(Reporting by Nidhi Verma; Editing by Ana Nicolaci da Costa)