India's August Fuel Consumption Posts Biggest Monthly Decline Since April

India’s fuel demand slipped further in August and posted its biggest monthly decline since April, as a surge in coronavirus infections continue to throttle economic activity and transportation, government data showed on Wednesday

Coronavirus cases has soared past 4.3 million on Wednesday making India the second worst-hit country in the world.

Sales of refined fuels, a proxy for oil demand, fell to 14.39 million tonnes in August, about 16% lower from a year earlier, its sixth consecutive year-on-year slide.

It also fell 7.5% from the prior month, its biggest month-on-month decline since April, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum and Natural Gas showed.

Diesel consumption, a key parameter linked to economic growth and accounts for about 40% of overall refined fuel sales in India, fell by about 12% to 4.85 million tonnes last month from 5.51 million tonnes in July.

On an annual basis, demand for diesel declined about 20.8%. Falling monthly diesel sales indicate a slowing economic and industrial activity.

India’s economy contracted 23.9% in the June-quarter as consumer spending, private investments and exports collapsed during the lockdown imposed in late March to curb the coronavirus outbreak.

India’s economy is projected to contract 11.8% on the year in the current fiscal year beginning from April, India Ratings and Research, a domestic arm of ratings agency Fitch, said on Tuesday. The economy is projected to contract 11.9% in the current quarter.

Heavy floods in some Indian states, such as Gujarat, Assam and Odisha, also disrupted life and hit industrial and construction activity.

Sales of gasoline, or petrol, fell by 7.4% from a year earlier to 2.38 million tonnes, although it rose 5.3% from 2.26 million tonnes in July.

August naphtha sales decreased by 24.6% to 1.07 million tonnes from a year earlier and was down 16.4% from July.

Sales of bitumen, used for making roads, rose 39.1% on an annual basis, but was down about 18% month-on-month.

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