Driving activity increased in India this month, signalling a recovery in auto fuel consumption, after many states eased mobility restrictions following a slump in daily Covid-19 cases.
India remains the second most-infected country in the world with 31.1mn coronavirus infections as of today, according to Johns Hopkins University data, but daily cases have fallen to around 41,000 from a record high of over 400,000 in early May.
Average driving activity across India over 1-17 July stood at 52pc above a 13 January 2020 baseline, compared with just 8pc above the same baseline in June, according to mobility data from US technology firm Apple. Average driving activity was 43pc below the baseline in May when most parts of the country were under strict lockdowns to curb a second wave of virus cases.
Gasoline consumption rose in line with the increase in driving activity, averaging 582,000 b/d in the first half of July from 510,000 b/d in the same period a month earlier, according to data from state-controlled refiners that account for around 90pc of the country's fuel sales. Demand averaged 493,000 b/d in July 2020 and 563,000 b/d in pre-pandemic July 2019. Diesel demand was unchanged from the first half of June at 1.23mn b/d but higher on the year. Consumption averaged 1.39mn b/d in July 2019.
But higher retail prices pose a headwind to demand recovery, though increased driving activity has pushed up motor fuel consumption. Retail gasoline prices are at 107.80 rupees/litre ($1.44/l) in Mumbai today, having risen past the three-digit mark for the first time ever in a major city last month, while diesel prices are at Rs97.50/l.
Meanwhile, the IEA expects oil product demand in India to rise strongly in the fourth quarter and grow on the year in 2021. Indian refiners have also increased run rates in anticipation of a rise in consumption from this month.
