Signs of revival are increasingly becoming visible in the Indian economy. After steel and cement, it is the turn of petroleum products. Having witnessed a modest growth rate of 3.4 per cent and 2.5 per cent during January and February respectively, consumption of petroleum products registered a remarkable growth of 6.9 per cent in March on the back of double-digit growth in consumption of petrol and diesel.
The two products together account for half of petroleum products’ consumption. Industry experts said that March growth was surprising, given the industrial and economic slowdown.
India’s industrial output has dipped 1.2 per cent during February (vis a vis 9.5 per cent growth in February 2008), the latest month for which data are available. Industrial output grew 2.8 per cent in April-February 2009, lower than the 8.8 percent growth recorded in the same period of the previous year.
Though March data are yet to be compiled, industry-wise data show a revival in steel and cement. Cargo movement was also better in March as harvest of rabi crop was on.
“Petrol and diesel sales should do better in April-May as well owing to the parliamentary elections,” said GC Daga, director (marketing), Indian Oil Corporation (IOC), the country’s largest oil marketer.
The harvesting and movement of rabi crops like wheat, pulses and oilseeds is also expected to aid demand during April-May.
The consumption growth for the fiscal 2008-09 stood at about 5 per cent, the lowest in three years. Growth rate in 2007-08 was 6.8 per cent.
The most spectacular growth in March was seen in petrol, which registered a growth of 13.3 per cent. Diesel consumption also grew at an impressive 11.5 per cent.
Annual growth rate for petrol and diesel stood at 9.1 and 9.4 per cent respectively. Consumption of Naphtha also grew by 18.7 per cent in March while the annual growth was 8.2 per cent.
Naphtha usage for power production is estimated to have increased as government allowed duty-free imports.
Sales of aviation turbine fuel (ATF) dipped 8.9 per cent in March while the decline for the whole year was 1.9 per cent. ATF decline was on account of curtailed flight operations. Industry officials pointed out that ATF sales had probably dipped after a gap of five years.
