Lockdown cuts petrol sales by 61%, diesel by 56% in April; LPG up 12%

Petrol and diesel sales dropped by a record 61% and 56.5%, respectively, in April from a year earlier but an improvement in demand in the second half of the month signalled the worst was probably over, according to industry executives. Fuel sales have crashed as the nationwide lockdown has mostly […]

Petrol and diesel sales dropped by a record 61% and 56.5%, respectively, in April from a year earlier but an improvement in demand in the second half of the month signalled the worst was probably over, according to industry executives.

Fuel sales have crashed as the nationwide lockdown has mostly kept people indoors, vehicles off the roads, planes grounded and factories silent. The 40-day lockdown, imposed by the government to fight the coronavirus pandemic, is expected to end on May 3 but its partial easing since April 20 slightly improved fuel demand as the government permitted some economic activity and eased mobility restrictions, executives said.

Petrol sales decline of 61% for the full month is an improvement over 64% decline in the first half of April. Similarly, diesel sales for the month fell 56.5%, better than the 61% drop witnessed in the first half of April.

Jet fuel sales dropped 91.5% in April, slightly better than 94% drop witnessed in the first half, as increased cargo flights and rescue missions used up some fuel. These fuel sales data are for state-run oil companies, which control about 90% of the domestic market.

By contrast, the sale of cooking gas, or liquefied petroleum gas (LPG), which had risen by 21% in the first half of April moderated in the second half. For the full month of April, its sales expanded 12% from a year earlier mainly on increased customer base. The demand spike witnessed at the beginning of the lockdown period has faded and the sales growth returned to normal, an executive said, adding that there are no more panic bookings.

Executives expect fuel sales to sharply rise in May as the lockdown is ending on May 3. “The moment factories and offices open and people come out of their homes, things would rapidly change and demand would lift,” an executive said. “But everything would depend on the way government lifts lockdown.”

Lockdown is widely expected to be lifted in a staggered manner and fuel demand could take months to return to levels before the pandemic.

Refiners are overflowing with stock and waiting for demand to return. Many refineries are operating at less than 50% capacity currently as they are short on space to store refined products.

Demand for all fuels except cooking gas collapsed April 2020 vs year-ago period.

Fuel Sales growth
Diesel -56.5%
Petrol -61%
Jet fuel -91.5%
LPG 12%

Source Article

Lois C. Ferrara

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