Fuel demand slips to 2-yr low
New Delhi, Oct 16: India’s fuel demand slipped to its lowest in over two years in September after a fall in diesel and industrial fuel consumption negated the rise in petrol and LPG consumption.
Consumption of petroleum products in September dropped to 16.01 million tonnes, its lowest since July 2017, from 16.06 million tonnes in the same month last year, according to data from the Petroleum Planning and Analysis Cell (PPAC).
Diesel, the most used fuel in the country, saw demand drop by 3.2 per cent to 5.8 million tonnes, while naphtha sales were down by a quarter to
844,000 tonnes. Bitumen, used in road construction, too saw consumption drop by 7.3 per cent to 343,000 tonnes. Fuel oil sales edged 3.8 per cent lower in September to 525,000 tonnes.
These downward trends negated the rise in cooking gas (LPG) and petrol demand. The sale of petrol rose 6.2 per cent to
2.37 million tonnes, but sale of jet fuel or ATF fell
1.6 per cent to 666,000 tonnes. LPG consumption surged 6 per cent to 2.18 million tonnes on the back of government's push for the use of cleaner fuel in household kitchens in rural areas in place of firewood to check pollution and safeguard the health of women.
Kerosene, which is fast being replaced by LPG and natural gas as a cooking medium, saw demand fall almost 38 per cent to
176,000 tonnes. Petroleum coke consumption was however 18 per cent higher at 1.73 million tonnes.
Meanwhile, Fitch Solutions revised downward its India oil demand forecast, reflecting a deteriorating macroeconomic backdrop and rising risks to growth. “We now forecast demand growth to average 3.8 per cent y-o-y over the three years to
2021, down from 4.6 per cent previously,” it said, adding softening of Indian fuel demand adds to an increasingly bearish outlook for fuel demand globally. “We had previously flagged India as the outperformer, forecast to overtake China as the global engine for growth. While the view still holds in the longer term, the near-term prospects have weakened,” it said.
More diversified demand growth will offer a level of resilience moving forward, but structurally lower demand growth in China and common Asian emerging markets' exposure to a weaker external environment will drag to the downside. “We have revised down our India oil demand forecast, reflecting a deteriorating macroeconomic backdrop and rising risks to growth. In part this reflects the downward revision to the country's GDP growth forecast,” Fitch said. “Growth has disappointed expectations, dragged down by slowing private consumption, weakened investment and underperformance in the services sector,” it added.