India's fuel demand rose 5.52% in July

Driven higher by petrol sales, which reflects surge in passenger vehicles sales

India's fuel consumption rose an annual 5.52% in July, driven by higher petrol sales which reflected a surge in passenger vehicles sales, government data showed.

Fuel consumption, a proxy for oil demand, totalled 14.03 million tonne last month, data posted on the website of the Petroleum Planning and Analysis Cell showed.

India ended subsidies on diesel sales in October and since then regular changes in retail prices have narrowed the pricing gap with gasoline, boosting demand for petrol-driven cheaper vehicles.

Local diesel sales last month declined to the lowest since October at 5.7 million tonne, a fall of 0.55% from a year earlier, the data showed.

Diesel demand also waned as market-driven prices ended its role as a substitute to fuel oil, demand for which rose 25.4% in July.

Last month improved monsoon rains and electricity supply also dented sales of diesel, widely used by farmers for running gensets to irrigate farm lands.

Sales of gasoline, widely used for transportation, surged 12.9% from a year earlier, depicting an 11.43% rise in passenger vehicle sales.

Local cooking gas sales surged an annual 10.4% on improved supplies aimed at curbing use of kerosene, demand for which fell 2.52%.

Naphtha consumption rose about 15.3% as a new plant, operated by ONGC Mangalore Petrochemicals Ltd, started operation in southern India.