India’s December fuel demand scales 11-month peak as recovery gathers pace

(Reuters) – India’s fuel consumption in December rose for a fourth straight month as economic activity and transport demand continued to recover from a coronavirus-led hiatus.

Consumption of fuel, a proxy for oil demand, rose 4.1% to 18.6 million tonnes in December, the highest since January 2020, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed on Friday.

However, on an annual basis, demand slipped by 1.8%, indicating that consumption in Asia’s third-largest economy hasn’t yet reached pre-pandemic levels.

India’s fuel consumption scales 11-month peak in December

A private survey earlier in the week showed that India’s factory sector ended a rough 2020 on a stronger note, as manufacturers boosted production to meet rising demand despite a grim employment situation.

But Apple Mobility Trends showed that driving in India, Brazil, Saudi Arabia and Australia has surpassed pre-pandemic levels.

Diesel consumption, a key parameter linked to economic growth and which accounts for about 40% of overall refined fuel sales in India, rose 1.9% to 7.18 million tonnes from the previous month, while declining by 2.8% year-on-year.

Gasoline, or petrol, sales rose 1.5% from November to 2.7 million tonnes and by an annual 9.3%.

Sales of cooking gas, or liquefied petroleum gas (LPG), rose more than 7% to 2.53 million tonnes on a monthly and annual basis, while naphtha sales fell by 2.4% to 1.24 million tonnes from a year earlier.

Sales of bitumen, used for making roads, rose about 20.6%, while fuel oil decreased by about 11.1% last month.