India’s fuel demand surges 6.7 per cent in October

NEW DELHI: India’s fuel demand surged 6.7% in October after declining in September, aided by a sharp rise in petrol and diesel consumption.

The fuel consumption rose 7.8% in the seven months through October this year, according to the Petroleum Planning and Analysis Cell (PPAC), an oil ministry’s arm. A fast expanding Indian economy and a relatively lower fuel prices have boosted demand for oil in India.

In October, the demand for all oil products rose to 16.5 million metric tonnes (MMT) from 15.5 MMT a year ago.

September was the only month demand for petroleum products fell this year, about 2%. The consumption of petrol fell about 3.5% while that of diesel shrank about 11.5% in September mainly due to the rise in prices and higher base in the same month previous year, PPAC said in its monthly commentary.

Petrol consumption rose 13.8% to 2.1 million tonnes in October. The demand for diesel, which accounts for 40% of all fuels consumed in the country, climbed 5.1% to 6.7 million tonnes. New car purchases, fuelled by the festive season, helped boost demand for petrol and diesel in October.

The consumption of kerosene, mostly used by rural poor for lighting and cooking, fell by a third in a year to 380,000 metric tonnes in October. The consumption dramatically shrank in just a month from September this year when it was 501,000 tonnes or 31% higher. This is mainly a result of the Centre’s decision to cut 5% allocation of subsidized kerosene to states every quarter and some voluntary cuts taken by some states as supply of electricity and cooking gas rise across the country.

The demand for liquefied petroleum gas (LPG), mostly used as cooking gas in millions of Indian homes, expanded 10% in October, as the government drive to take cleaner fuel to more homes intensified. State firms have just completed giving away 1 crore fresh connections to poor households this fiscal year. This addition over an effective base of about 17 crore domestic cooking consumers is expected to give a big boost to LPG consumption.

The demand for Aviation Turbine Fuel (ATF) also climbed 9% as a festive season drove up air traffic.