Fuel demand has returned to pre-COVID levels: IOC’s Vaidya

‘March first-half diesel sales rise 7.4%; reflating economy to spur consumption’

India’s fuel demand, except for aviation turbine fuel, has returned to pre-COVID levels and a reflating economy will help consumption grow in the near future, the head of the nation’s top oil firm said on Tuesday.

Fuel sales had fallen a record 45.8% in April when a nationwide lockdown was imposed to check the spread of coronavirus infections. Demand started to recover with the easing of lockdown restrictions, with petrol returning to normal growth first and now diesel too reaching pre-COVID levels.

“Except for ATF, we have touched normal demand,” Indian Oil Corporation (IOC) Chairman Shrikant Madhav Vaidya said. “We are back on track.” While petrol sales had reached pre-COVID levels a few months ago, diesel sales had risen 7.4% year-on-year in the first half of March. LPG sales had shown growth even during the lockdown. With airlines not operating all flights, ATF sales remain below normal. “ATF may take a quarter’s time to return to normal, maybe 3-4 months,” he said.

IOC, he said, was bullish about fuel demand recovery as the economy grows. “Let’s hope for the best with the vaccine roll-out,” he added. Diesel sales in the first half of March rose to 2.84 million tonnes while petrol demand climbed 5.3% to 1.05 million tonnes. This is the first annual rise in petrol sales since October.

ATF sales, which fell more than 80% in the aftermath of the lockdown, was down 36.5% in the first half of March. India’s economy returned to growth in the last quarter as real GDP is estimated to have expanded 0.4% year-on-year after two quarters of contraction.

OPEC’s monthly report last week forecast a 13.6% jump in India’s oil demand in 2021 to 4.99 million barrels per day.

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