Diesel sales fall in June as monsoon sets in, cuts demand in agri sector

Diesel sales dropped in June as the arrival of monsoon cut demand in the agri sector and reduced vehicular movement, preliminary industry data showed.

Demand for diesel, the most consumed fuel in the country -- accounting for about two-fifths of the total demand, fell 3.7 per cent to 7.1 million tonnes in June compared to the year-ago period.

Diesel had soared 6.7 per cesalesnt and 9.3 per cent in April and May, respectively, as agriculture demand picked up and cars yanked up air-conditioning to beat summer heat.

Month-on-month sales were almost flat compared to 7.09 million tonnes of diesel consumed in May.

Petrol sales, however, rose 3.4 per cent to 2.9 million tonnes in June 2023 compared to the year-ago period. Sales were unchanged month-on-month, the data showed.

Petrol and diesel sales have been on the rise since the second half of March on the back of a pick-up in industrial and agriculture activity. But the arrival of monsoon has cooled temperatures and reduced demand for running diesel gensets to irrigate fields and cut down consumption in tractors and trucks in the first half of June.

Petrol consumption during June was 33.5 per cent more than COVID-marred June 2021 and 20.6 per cent more than pre-pandemic June 2019.

Diesel consumption was up 30 per cent over June 2021 and 6.5 per cent higher than in June 2019.

With the aviation sector booming with summer travellers, jet fuel (ATF) demand soared 6 per cent to 587,300 tonne in June compared to the same period last year. It was 140 per cent higher than in June 2021 but 4.6 per cent lower than pre-Covid June 2019.

Month-on-month sales fell 2.4 per cent against 6,02,000 tonnes in May 2023.

The Indian economy has gained pace with a pick-up in government and private capital spending. Manufacturing too has picked up, while the services sector has been robust.

The country's oil demand during the last few months was supported by strong industrial activity, industry officials said.

Cooking gas LPG sales were down 0.8 per cent year-on-year to 2.27 million tonnes in June. LPG consumption was almost flat compared to June 2021 and 28.5 per cent more than pre-COVID June 2019.

Month-on-month, the demand fell 3.4 per cent compared to 2.36 million tonnes of LPG consumption during May, the data showed.