Growth of fuel sales in India signals worst of coronavirus rout might be over

Demand for jet fuel rises the most over two-week period as lockdown eases

Aboost in Indian fuel consumption for everything from diesel to gasoline may signal the worst of the virus-driven demand crash is over.

Fuel sales surged during the first half of May compared with the same period last month as trucks returned to the roads and motorists jumped in their cars to drive to work following the easing of some lockdown restrictions.

Demand for jet fuel rose the most over the two-week period as India deployed planes to bring back hundreds of thousands of stranded citizens across the world. Indian fuel consumption fell to the lowest in more than 12 years last month as the world’s biggest lockdown kept more than a billion people at home.

Deepest recession ever

A return to pre-virus demand levels is expected to be slow and long, with the nation extending some restrictions until the end of May due rising infections and Goldman Sachs Group Inc predicting the country will experience its deepest recession ever with a plunge in second quarter gross domestic product.

Diesel sales by India’s top three fuel retailers from May 1-15 increased by 75 per cent compared with the same period in April, while gasoline climbed 72 per cent and jet fuel almost doubled, according to preliminary data from officials with direct knowledge of the matter.

However, consumption is still down from the same period last year. Jet fuel sales are about 87 per cent lower, while diesel is down by 38 per cent.

Indian fuel consumption fell to the lowest in more than 12 years last month as the lockdown kept more than a billion people at home.

People are more concerned about short-term challenges and not the benefit of these measures [taken by government] in the long run.”

Ajit Mishra | Head of research, Religare