India’s fuel consumption dropped sharply in the first half of April as a resurgence in Covid-19 infections and local restrictions hit the movement of people and slowed down economic activities.
Market data for the first fortnight of the month shows petrol sales dropping more than 5% and diesel consumption, a bellwether for economic activities, sliding almost 3% from a month ago. Consumption of jet fuel and LPG, or household cooking gas, too shrank more than 7% and sales 6%, respectively.
Nothing captures the impact of renewed curbs than the sharp drop in petrol sales. Its demand had posted robust recovery once the unlock process began last year and has consistently grown over the previous months as people preferred personal vehicles to public transport.
That’s why the worst may not be over for refiners. Fuel consumption could decline further as more states slap weekly lockdowns or restrict movement and people prefer to confine themselves at home. Manufacturing and mining activities too remain a worry as they shrank 3.7% and 5.5%, respectively, from a year ago in February.
But still, the fall in fuel consumption will not be as drastic as last year when 70% of the demand evaporated during the countrywide lockdown.