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India's October fuel demand marks first year-on-year gain in 8 months

Activity in India's dominant services industry also expanded for the first time in eight months in October as demand surged

Topics
Coronavirus | Fuel demand | Indian Economy

Reuters 

Photo: Reuters
With public transportation gradually picking up, fuel demand is expected to improve further | Photo: Reuters

India's fuel consumption in October posted its first year-on-year increase since February, as slowing cases and increased mobility accelerated an economic recovery, data showed on Thursday.

Consumption of refined fuels, a proxy for oil demand, rose 2.5% in October from the prior year to 17.78 million tonnes and nearly 15% higher from the previous month, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed.

"GST (Goods and Services Tax) collections, power demand, PMI etc all are indicating increased economic activity and Covid cases are also coming down to a point where demand is coming back to normalcy," said K Ravichandran, senior vice president at ICRA, a unit of Moody's Investors Service.

With public transportation gradually picking up, is expected to improve further, he added.

India's daily Covid-19 case count has steadily declined since September, although total cases remain north of 8.5 million- the second highest in the world.

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Activity in India's dominant services industry also expanded for the first time in eight months in October as demand surged.

Diesel consumption, a key parameter linked to economic growth and which accounts for about 40% of overall refined fuel sales in India, rose 7.4% to 6.99 million tonnes on an annual basis, and climbed about 27% month-on-month.

ALSO READ: Retail inflation refuses to cool down, prints 7.61% in October

Sales of gasoline, or petrol, rose by 4.3% from a year earlier to 2.65 million tonnes, and by 8.2% from 2.45 million tonnes from September.

Cooking gas or liquefied petroleum gas (LPG) sales increased by 3% to 2.42 million tonnes from a year earlier and 6.6% from the previous month, while naphtha sales rose 15% to 1.30 million tonnes and about 14% month-on-month.

Sales of bitumen, used for making roads, rose about 47% versus last year, and fuel oil increased by about 12.8% last month.

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First Published: Thu, November 12 2020. 21:12 IST
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