Consumption of petroleum products in India stood at 15.9 million tonnes in September 2021. India’s petroleum products’ consumption had fallen to a nine-month low of 14.8 million tonnes in May 2021, due to the second wave of Covid-19. This had been 23.2 per cent lower than its pre-Covid level. With the easing of restrictions in subsequent months, there has been a gradual recovery in demand for petroleum products. As a result, the gap between the pre-Covid and current levels of consumption has declined. In July and August 2021, consumption of petroleum products was 7-8 per cent lower than in the same period in 2019. In September 2021, this decline narrowed down further to 1.7 per cent in a similar comparison.
In September 2021, eight of the 12 petroleum products recorded an increase in consumption over September 2019. For three of the remaining four products, although consumption continued to be lower compared to the pre-Covid level, the extent of the deficit narrowed considerably.
Consumption of liquefied petroleum gas (LPG) stood at 2.4 million tonnes in September 2021. This was 9.2 per cent higher than in September 2019. Consumption of LPG, which is commonly used as domestic cooking fuel, was not impacted much by the lockdown. Barring August 2021, LPG consumption has been higher than its pre-pandemic level in all months since April 2021.
Petrol consumption stood at 2.6 million tonnes in September 2021. Demand for petrol has been higher than its pre-Covid level since July 2021 due to the relaxation in travel restrictions and a preference for private transportation. In July and August 2021, petrol consumption had increased by 4-5 per cent over its corresponding 2019 levels. In September 2021, the increase was even sharper, of 9.5 per cent. This increase has been in spite of the continued rise in petrol prices. During July-September 2021, petrol prices in urban India have been 30-42 per cent higher than their corresponding 2019 levels.
In contrast to petrol, consumption of other transportation fuels like high speed diesel and aviation turbine fuel (ATF) has continued to be lower than the corresponding 2019 levels. But, the extent of the decline has narrowed down substantially with the lifting of travel restrictions. Demand for diesel stood at 5.5 million tonnes in September 2021. This was a 5.6 per cent decline compared to September 2019. In August 2021, the decline had been much higher, at 8.4 per cent. Similar to petrol, diesel prices in urban India have also increased by 34-42 per cent in the past three months as compared to their corresponding pre-Covid levels.
The decline in demand for ATF remained in double digits in September 2021, at 37.5 per cent. The previous four months had seen a 43-60 per cent decline over its corresponding 2019 levels. In June 2021, domestic flight operations had been allowed to operate at only 50 per cent of their capacity due to a rise in Covid cases. ATF consumption during this month had fallen to 0.2 million tonnes. The limit on airline capacity has been gradually eased over the months. By mid-September, domestic airlines were allowed to operate at 85 per cent of their operational capacity. ATF consumption has correspondingly increased since July, reaching 0.4 million tonnes in September 2021. From 18 October 2021, the capacity restrictions on domestic flight operations have been removed completely. This is likely to boost demand for ATF in the coming months.
Among industrial fuels, naphtha and furnace oil consumption rose by 1.2 per cent and 3.1 per cent respectively, compared to September 2019. Naphtha consumption rose to 1.1 million tonnes in September 2021, after a double digit decline over the pre-Covid levels in July and August 2021. Consumption of bitumen & asphalt, which is primarily used in the construction of roads, rose for the fourth consecutive month over the corresponding pre-Covid level. In September 2021, the increase was of 38.7 per cent, with its consumption standing at 0.4 million tonnes.
Petroleum coke was the only commodity that faced a sharper fall in September 2021 over its pre-Covid level, as compared to the fall in the previous three months. During June-August 2021, its consumption had been 22-31 per cent lower than its corresponding 2019 levels. In September 2021, the decline widened to 35.2 per cent. Consumption of petroleum coke, which is used in steel and cement plants, stood at 1.1 million tonnes in September 2021. The current coal shortage is expected to have an adverse impact on cement and steel production in the country, which is likely to further affect the demand for petroleum coke in coming months.
|Month||May 21||Jun 21||Jul 21||Aug 21||Sep 21|
|Motor Spirit (Petrol)||-27.3||-8.7||4.3||4.6||9.5|
|High Speed Diesel||-29.0||-16.9||-10.3||-8.4||-5.6|
|Aviation Turbine Fuel||-60.6||-60.4||-52.1||-43.1||-37.5|
|Bitumen and Asphalt||-8.8||5.0||6.8||73.7||38.7|
|Light Diesel Oil||55.5||76.4||49.7||30.7||42.3|
|Other petroleum products||-7.9||-12.9||14.9||18.7||30.9|