Petrol, diesel sales drop in first half of March after hitting record high in February

India's fuel demand fell in the first half of March after posting record growth in the previous month, preliminary industry data showed on Thursday. Fuel sales soared to the highest levels in February on the back of robust demand from the agriculture sector as well as transport picking up after the winter lull.

March saw the seasonal slowdown kicking in with a rise in temperatures.

Petrol sales decreased by 1.4 per cent to 1.22 million tonnes in the first half of March when compared with the same period of last year. Sales fell 0.5 per cent month-on-month, the data showed.

Diesel, the most consumed fuel in the country, saw demand slip 10.2 per cent to 3.18 million tonnes from March 1 to 15 when compared with 3.54 million tonnes of sales in the same period a year back. Month-on-month the demand was down 4.6 per cent.

During the first half of February, petrol consumption had jumped by almost 18 per cent year-on-year while diesel sales were up nearly 25 per cent.

The consumption of petrol in the first half of March was 16.4 per cent more than the Covid-marred first half of March 2021 and almost 23 per cent more than in the same period of 2020.

Diesel consumption was up 11.5 per cent over the first half of March 2021 and 20.2 per cent higher than in 2020.

While cold conditions slowed truck movements in January, the onset of spring revived demand in February.

With the continued opening of the aviation sector, India's overall passenger traffic at airports inched closer to pre-Covid levels.

Reflecting the trend, jet fuel (ATF) demand jumped 19.2 per cent to 2,94,900 tonnes during the first half of March when compared to the same period last year. It was 35.6 per cent higher than in March 2021 but 8.2 per cent lower than in March 2020. Month-on-month sales were almost flat.

Sources said while domestic air travel is back to pre-Covid levels, international traffic is lagging because of continued restrictions in some countries.

India's recovery has continued to gain momentum in recent months but has been accompanied by elevated inflation. This slowed the momentum a bit. The country's oil demand had been rising steadily since the easing of COVID-19 restrictions.

Cooking gas LPG sales fell 9.7 per cent year-on-year to 1.18 million tonnes from March 1-15. LPG consumption was 7.1 per cent higher than in March 2021 and 3.6 per cent more than in March 2020.

Month-on-month, the demand dropped 15.10 when compared to 1.39 million tonnes of LPG consumption during February 1-15, the data showed.

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