India's fuel demand rises at fastest pace in three months

Higher petrol consumption due to the SC order helps demand surge 12.7% in January to 15.71 million tonnes

India’s annual fuel demand in January rose at its fastest pace in three months, thanks to higher gasoline consumption after the country's top court temporarily banned the sale of large diesel cars in its capital city.

The Supreme Court had imposed the ban in December to combat toxic smog in Delhi, one of the world's most polluted cities, and said it would consider extending the ban to diesel cars with engine capacity of less than 2,000 cc.

Fuel consumption, a proxy for oil demand in Asia's third-largest economy, surged 12.7% to 15.71 million tonnes, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed.

India is a bright spot in a dull international energy market and the International Energy Agency said last year that New Delhi would be the primary driver of global energy demand over the next 25 years.

Consumption of gasoil or diesel, which comprises about 40% of refined fuels used in India, rose nearly 8% to 6.28 million tonnes last month, signalling a rise in construction activity. India has not released the industrial output data for January.

Sales of gasoline, or petrol, surged 11.4% from a year earlier to 1.82 million tonnes as passenger car sales likely edged up last month. Industry data is yet to be reported.

Cooking gas or liquefied petroleum gas (LPG) sales increased 4.4% to 1.69 million tonnes, while naphtha sales were 22.8% higher at 1.10 million tonnes.

Sales of bitumen, used on roads, were 28.9% higher, while fuel oil use rose 13.75% in January.