India's fuel demand rebounded in June as a pick-up in economic activity following easing of coronavirus restrictions accelerated petrol sales to 90 per cent of pre-virus levels. Petrol sale rose 5.5 per cent year on year to 2.12 million tonnes in June. It was up 29.35 per cent from May but 10.4 per cent lower than pre-Covid time in June 2019, preliminary data from state fuel retailers showed.
The sale of Diesel - the most used fuel in the country - rose 18.5 per cent from May to 5.35 million tonnes but was down 1.84 per cent from June 2020 and 18.8 per cent from June 2019.
This is the first monthly increase since March. Fuel demand had recovered to near-normal levels in March before the onset of the second wave of Covid-19 infections led to the reimposition of lockdowns in different states, stalling mobility and muting economic activity.
Consumption in May slumped to its lowest since August last year as lockdowns and restrictions in several states stalled mobility and muted economic activity.
Fuel demand showed signs of resurgence in June after restrictions began to be eased and the economy gathered pace. With COVID case addition continuing to decline and vaccination pace picking up, the state governments have continued to reopen, though some exceptions such as Maharashtra exist.
"The activity recovery has been driven by state governments reopening economies, with a quick return to the near-normal status in several states, particularly in North. However, new COVID variants and fears of a third wave/difficulty in implementing social-distancing led to some caution as well," Jefferies said in a report.
Maharashtra, notably, has deferred further reopening in Mumbai and closed malls in Pune again. Oil Minister Dharmendra Pradhan had on Tuesday stated that India's fuel demand, which had been battered by a deadly second wave of coronavirus infections, would recover to pre-pandemic levels by the end of 2021.
"We are confident by the end of this calendar year we will be in a position to restore our original (pre-Covid) consumption behaviour," Pradhan said.
Consumption of LPG, the only fuel which showed growth even during the first lockdown because of free supplies by the government to the poor, rise 9.5 per cent year on year to 2.23 million tonnes. It was up 26.3 per cent over June 2019.
With airlines yet to resume full-scale operations because of travel restrictions around the globe, jet fuel sales at 2,33,400 tonnes were up 9.9 per cent year on year but 61.7 per cent lower than June of 2019.
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