Festival demand spurs India’s gasoil consumption to above pre-Covid levels

India’s gasoil consumption in October rose above pre-Covid levels for the first time in a year, as increased industrial activity ahead of the festival season spurred demand for the fuel.

The country’s factory activity expanded in October at its quickest pace in eight months on strong demand and increased output, according to the Manufacturing Purchasing Managers’ Index (INPMI=ECI), compiled by IHS Markit.

Gasoil sales totalled 5.86 million tonnes last month, equivalent to 189,200 tonnes per day, up 1.27% from October 2019, but a decline of 5.08% from the same month last year, preliminary sales data of state fuel retailers showed.

Gasoline sales at 2.48 million tonnes rose by 3.93% from a year earlier, the data showed.

India’s gasoil consumption, which accounts for about two-fifths of the country’s fuel demand, typically rises during a month-long festival season that ends with the celebration of Diwali as diesel-guzzling trucks hit the road and industrial activity gathers pace.

Easing of Covid-led restrictions also aided to a recovery in diesel sales.

“Last year Diwali was in mid-November so sales were spread over two months – October and November. This year sales are mostly visible in October,” said an official at one of the state fuel retailers. India will celebrate Diwali.

Improved overseas fuel margins and rising diesel sales in the world’s third-biggest oil consumer and importer are helping refiners to raise crude processing.

State retailers – Indian Oil Corp (IOC.NS), Bharat Petroleum Corp and Hindustan Petroleum Corp (HPCL.NS) – control about 90% of the fuel stations in the country.

Source: Reuters