Petro consumption surges in April

...but direct sales to industry remain sluggish.

Driven by rabi crop harvesting and general elections, consumption of petroleum products grew by 4.6 per cent in April, the second highest since September 2008, according to provisional data complied for the month by industry. The average growth during the year 2008-09 stood at 3.5 per cent.

“The harvesting and transportation of rabi crops like wheat, pulses and oilseeds, along with the activities related to general elections, has generated some additional business during April,” said an industry official.

While petrol consumption grew by a decent 7.8 per cent, diesel growth was relatively lower at 4.9 per cent. The two products together account for half of petroleum products’ consumption. However, in both these products the growth came from retail sales, while direct sales to industry declined -- of petrol by 4.9 per cent and diesel by 1.1 per cent.

 

Sales of aviation turbine fuel (ATF) dipped 3.2 per cent in April on account of curtailed flight operations. LPG sales went up by a marginal 1.7 per cent.

Industry experts describe the 4.6 per cent consumption growth to be good, given the current circumstances. India’s industrial output dipped 2.3 per cent during March (vis a vis 5.5 per cent growth in March 2008), the latest month for which data is available. Industrial output grew 2.4 per cent in the 2008-09 fiscal, lower than the 8.5 percent growth recorded in 2007-08.

Though April data is yet to be compiled, industry-wise data show a revival in core industries like steel and cement, though capital goods manufacturing growth continues to be sluggish.

“In spite of the general slowdown, a consumption growth rate of 4.6 per cent is significant. This growth rate is expected to improve in the coming months,” said Deepak Pareek, analyst at Angel Broking.

Globally, most economies are witnessing a dip in consumption. Weak industrial production, high unemployment rates and less travel are the main factors behind the collapse in demand for petroleum products.

The Organisation of Petroleum Exporting Countries (Opec) estimates that crude oil demand in 2009 will decline by 1.82 per cent, to 84.03 million barrels/day.