Preliminary industry data reveals a decline in diesel sales in June, attributed to reduced demand in the agricultural sector and decreased vehicular movement due to the arrival of the monsoon. Diesel, which accounts for approximately two-fifths of the country's total fuel demand, experienced a 3.7 percent drop, amounting to 7.1 million tonnes compared to the same period last year.

Share Market Live

NSE

In contrast, diesel sales had seen a notable increase of 6.7 percent in April and 9.3 percent in May, driven by rising agricultural demand and the use of air-conditioning in vehicles to combat the summer heat. Month-on-month sales remained almost unchanged compared to May, standing at 7.09 million tonnes.

On the other hand, petrol sales witnessed a 3.4 percent growth, reaching 2.9 million tonnes in June 2023 compared to the previous year. Month-on-month sales remained steady. The upward trend in petrol and diesel sales had been observed since the second half of March, driven by increased industrial and agricultural activities.

However, with the onset of the monsoon, temperatures have cooled down, leading to reduced demand for diesel generators for irrigation purposes and decreased consumption in tractors and trucks during the first half of June.

In terms of year-on-year comparison, petrol consumption in June 2023 increased by 33.5 percent compared to the COVID-impacted June 2021 and by 20.6 percent compared to the pre-pandemic June 2019. Diesel consumption also experienced a significant rise, with a 30 percent increase over June 2021 and a 6.5 percent increase compared to June 2019.

In the aviation sector, jet fuel (ATF) demand rose by 6 percent to 587,300 tonnes in June compared to the same period last year. This marked a 140 percent surge compared to June 2021, but a 4.6 percent decrease compared to pre-COVID June 2019. Month-on-month sales experienced a decline of 2.4 percent compared to May 2023.

Industry officials attribute the recent growth in India's oil demand to the acceleration of government and private capital spending, along with an uptick in manufacturing and a robust services sector.

In other fuel categories, cooking gas LPG sales witnessed a marginal year-on-year decrease of 0.8 percent to 2.27 million tonnes in June. Month-on-month sales fell by 3.4 percent compared to May, totaling 2.36 million tonnes. However, LPG consumption in June 2023 remained 28.5 percent higher than the pre-COVID June 2019 level.