For the second consecutive month in February, Indian fuel consumption fell to its lowest level since September, with record-high price levels hindering the recovery of demand. Petroleum product demand fell from the petroleum planning and analysis cell of the Petroleum & Natural Gas Ministry, 4.9 to 17.21 million tons, as demand for both petroleum and diesel fell. The country’s oil and diesel prices rose to their highest-level last month prior to further price increases by state-owned fuel retailers allegedly containing policy implications for ruling parties in ensuing elections in countries such as West Bengal. Diesel, the country’s most used fuel, fell 8.5% to 6.55 million tons while oil consumption fell by 6.5% to 2.4 million tons. Sale of bitumen used for road making was down 11%. The sales of naphtha remained unchanged.
Industrial compartments will be the backbone of growth in oil demand in 2021, the recent positive developments in industrial activities providing additional support to the healthy upswing for transportation fuels, said the addition of aviation to be under pressure during 2021 and a significant source of uncertainty. India’s economy returned to positive growth in the fourth quarter of 2020 when, after two quarters of contraction, its real GDP grew by 0.4% year-on-year. After a reduction in the daily number of new COVID-19 cases provincial and local lock-downs have begun. In spite of some improvements on a month-by-month basis, domestic flights were more than 10 per cent lower than in 2020
