India’s fuel consumption touches 11-month high in December 2020: PPAC

• However, even as there has been a significant improvement in demand, the figure is still about 2 percent lower than pre-COVID levels

• The demand for diesel saw a decline in November 2020 (6.9 percent), and now it has registered a decline again in December (2.7 percent)

New Delhi: India's fuel demand has touched an 11-month high in December 2020 as consumption of petroleum products recorded an improvement for the fourth consecutive month, data released by the Petroleum Planning and Analysis Cell (PPAC) showed. However, even as there has been a significant improvement in demand, the figure is still about 2 percent lower than pre-COVID levels. According to PPAC, the demand for petroleum products stood at 18.59 million tonnes (MT) in December 2020 as opposed to 18.94 MT recorded in December 2019.

The fuel demand has, however, witnessed a month-on-month increase for the fourth straight month on account of revival in transportation and business activity. India had consumed 17.86 MT of petroleum products in November 2020.

Diesel demand falls again in December 2020

According to the PPAC data, while the sale of petrol had reached pre-Covid level in September 2020, diesel consumption had turned normal in October (7.4 percent) last year. However, the demand for diesel saw a decline in November 2020 (6.9 percent), and now it has registered a decline again in December (2.7 percent). However, when compared to November's sale of 7.04 MT, diesel demand has witnessed marginal improvement in December 2020 as it stood at 7.18 MT.

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LPG is the only fuel to have shown growth throughout this period, with most people cooking at home and the government giving free LPG cylinders to the poor under Ujjwala scheme.

The backdrop

The figures for consumption of petroleum products for December 2020 are the highest on record since February 2020. After a nationwide lockdown was imposed in March 2020, fuel demand had dropped by 49 percent in April as industries were shut and vehicles went off-road. There has been significant improvement in consumption with the onset of festive season in October 2020. But since schools and educational institutions and several workplaces continue to remain shut, fuel demand is yet to touch pre-Covid levels. 

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