India's fuel sales drop in April on local restrictions to curb second wave

The second wave of coronavirus sweeping the nation has pummelled fuel sales in April as local restrictions clamped to curb the spread of inflection stifled demand, preliminary data showed.

"At the end of April, overall fuel demand is down by about 7 per cent from pre-Covid level of April 2019," Arun Singh, Director for Marketing and Refineries at Bharat Petroleum Corporation Ltd (BPCL), said.

India was under one of the world's severest lockdowns in April 2020, bringing to a halt almost all economic activity. Fuel sales had halved that month and so comparing current month sale to April 2020 will not throw a correct interpretation.

Sales of petrol -- used in cars and motorcycles -- fell to 2.14 million tonnes in April, the lowest since August, according to the preliminary data of state-owned fuel retailers.

Petrol sales in April were 6.3 per cent lower than March 2021 and 4.1 per cent lower than April 2019. Petrol sales in April 2020 were 872,000 tonnes.

Demand for diesel -- the most used fuel in the country -- fell to 5.9 million tonnes in April 2021, down 1.7 per cent from the previous month and 9.9 per cent from April 2019. Diesel sales in April 2020 were 2.84 million tonnes.

With airlines continuing to operate at less than capacity, jet fuel (ATF) sales in April were 377,000 tonnes, down 11.5 per cent over March 2021 and 39.1 per cent over April 2019. Jet fuel sales in April 2020 were 5,500 tonnes.

Sales volume of cooking gas LPG fell 3.3 per cent to 2.1 million tonnes in April 2021 when compared with the previous month. The sales were 11.6 per cent higher than 1.88 million tonnes in April 2019.

Indian authorities are scrambling for vaccines, medicines and oxygen as the nation faces its worst health crisis. The number of daily coronavirus cases in India slipped slightly, a day after becoming the first in the world to cross the 4 lakh mark.

India's new coronavirus cases rose by 3,92,488, while deaths from the infection jumped by 3,689 over the past 24 hours, according to health ministry data released on Sunday. Total case load now stands at 1.95 crore with 2,15,542 deaths.

"We were near pre-Covid level in March 2021, but new restrictions due to the second Covid-19 wave has temporarily reduced demand, equivalent to about 10 per cent of March 2021 demand for both personal mobility and industrial goods movement," Singh said. "Local fuel consumption will start to look up in June when second pandemic wave is expected to weaken."

Fuels sales could have been worse in April but for the elections in some states that saw increased use of vehicles for campaigning. Demand is likely to witness a sharper slump in May due to more impending restrictions.

Declining fuel sales will reduce crude intake by refiners, reducing operating run rate.