India’s diesel consumption in April hit a record 7.8 million tonnes aided by robust industrial and farm activities. Besides, heightened activity prior to the closure of the financial year also aided sales.
Diesel, which accounts for 44-45 per cent of the total refined petroleum products consumption in the world’s third largest fuel guzzler, is the mainstay of the transport sector.
According to the Petroleum Planning and Analysis Cell (PPAC), on an annual basis, diesel consumption was higher by 8 per cent from 7.2 mt in April 2022. However, on a m-o-m basis, the usage was flat.
The consumption of high-speed diesel (HSD) at 7.8 mt is the highest in the past two decades. In FY23, during November, December and March as well diesel consumption had hit 7.8 mt aided by rising industrial activity and growing personal travel.
In the case of petrol, India consumed 2.9 mt of motor spirit, which was higher by 3.6 per cent Y-o-Y, but declined m-o-m by 6.5 per cent from 3.1 mt in March 2023.
ICRA VP & Co-Group Head (Corporate Ratings) Prashant Vasisht said: “High consumption of diesel can be attributed to growth in the economy and possibly healthy industrial activity and the harvesting season for agriculture. Last year in April, offices and schools were just starting and gradually opened up over many months.”
Petrol and diesel consumption typically is higher in March every year due to heightened activity prior to closure of the financial year. April is usually a lower consumption month vis-a-vis March every year (barring events like Covid lockdowns etc), he added.
Diesel usage
An official with an oil marketing company (OMC) said the expectation is that diesel usage will largely be on the FY23 pattern, but the growth rate will undergo correction and be in the range of 5-6 per cent Y-o-Y.
“The annual growth in FY23 is around 12 per cent, which is on the back of a lower base in FY22. Now growth will largely be incremental with a boost coming in FY24 from heightened construction activities,” he added.
The consumption of liquefied natural gas (LPG) during April was flat on an annual basis at 2.2 mt but declined by 8.3 per cent m-o-m from 3.1 mt in March 2023.
“LPG consumption decline in April is due to significant fall in natural gas prices globally owing to which industrial consumers such as Morbi ceramic manufacturers have switched over to gas from propane/ LPG,” Vasisht said.