India’s gasoline and diesel sales growth moderated in April while LPG cooking gas consumption fell as record prices weighed on demand, according to preliminary industry data released Sunday.
Gasoline sales growth moderated to 2.1% in April from the same period a month earlier, while diesel demand was nearly flat. Cooking gas LPG, which had consistently shown growth even during the pandemic period, saw a massive 9.1% month-on-month drop in consumption in April.
State-owned oil companies had ended a 137-day hiatus in rate reviews on March 22 and began enacting a $30-per-barrel increase in the cost of raw material (crude oil) during that period when five States, including Uttar Pradesh, went to the polls.
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Petrol and diesel prices rose by 10 rupees a liter between March 22 and April 6 – the biggest increase over a 16-day period since fuel prices were deregulated two decades ago.
On March 22, cooking gas prices were also increased by 50 rupees per cylinder to 949.50 rupees – the highest rate ever for subsidized fuel.
Price increases moderate consumption.
Gasoline sales from state-owned fuel retailers, which control about 90% of the market, at 2.58 million tonnes in April, were nearly 20.4% higher than in the same period. last year and 15.5% higher than the period of 2019, according to preliminary industry. the data showed.
Consumption, however, was only 2.1% higher than the 2.52 million tonnes sold in March 2022.
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Diesel, the country’s most widely used fuel, saw sales jump 13.3% year-on-year to 6.69 million tonnes. This was 2.1% more than sales in April 2019. But it was only 0.3% more than consumption of 6.67 million tonnes in March.
Gasoline and diesel sales had risen 18% and 23.7% respectively in the first half of March as dealers and consumers hoarded fuel in anticipation of higher prices.
Diesel sales in March were the highest of any month for the past two years and higher than the total volume of diesel sold in April 2020, when the country was under full lockdown.
Industry sources said that while there was panic buying by individual vehicle owners during the first half of March, gas pump dealers filled not only their storage tanks , but also any mobile navigator or tank truck they had. Dealers hoped to make a quick buck by buying fuel at a lower rate and selling at higher revised prices.
As prices rose, consumption fell.
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Petrol and diesel prices hit the freeze button as election campaigning for five states including Uttar Pradesh resumed in early November 2021. The record 137-day freeze ended on March 22.
Jet fuel (ATF) sales rose 28.3% to 500,400 tonnes in April, but were 29.2% below pre-Covid levels of 2019. They were, however, 5.1% higher than sales from March 2022.
ATF sales are expected to pick up with the full opening of air travel.
India went into full lockdown, halting flights, halting rail and road movements, and shutting down businesses, in the last week of March 2020 to contain the spread of coronavirus. The March 2020 period was almost normal as the Covid restrictions were just beginning.
The government has given away free LPG cylinders in 2020 to help the poor fight the fallout from the strict lockdown. This has helped state oil companies register month-on-month growth, even as other transportation fuels have seen a sharp contraction in demand.
But in April, LPG consumption fell 9.1% month-on-month to 2.2 million tonnes. This was 5.1% more than in April 2021.
Sales of cooking gas moderated after a price hike of Rs 50 per bottle on March 22. LPG sales had increased by 17% during the first half of March.
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