India's first-half May diesel, gasoline and jet fuel consumption slumped compared with the first half of April, down by 20pc, 20pc and 38pc respectively as the Covid-19 pandemic led to strict shutdowns in most states.
Diesel use fell to 1.1mn b/d in the first two weeks of May from 1.38mn b/d a month earlier. It had averaged 960,000 b/d a year earlier and 1.54mn b/d in the first half of pre-pandemic May 2019, according to data from state-controlled refiners that account for around 90pc of the country's fuel sales. Demand for gasoline fell to 450,000 b/d from 562,000 b/d a month earlier, 325,000 b/d a year earlier and 620,000 b/d in the 2019 period.
Jet fuel consumption averaged 66,000 b/d in the first half of May from 107,000 b/d a month earlier, 22,000 b/d a year earlier and 162,000 b/d in the 2019 period. LPG demand rose by 7.7pc to 1.12mn t during the period from 1.04mn t a month earlier. Consumption totalled 1.2mn t a year earlier and 965,000t in the pre-pandemic 2019 period.
Demand attrition is expected to continue in June with refineries trimming runs to 80pc or perhaps lower from around 95pc last month, market participants said, with overflowing storage and postponement of maintenance shutdowns forcing run cuts. This will also affect imports of crude, especially spot shipments from the US and Africa, as Indian refiners have no space to store excess crude unless they hire tankers to store it offshore. State-controlled refiners are obliged to take Middle East term cargoes.
Indian diesel consumption in the 2021-22 fiscal year ending 31 March was forecast to rise by 13pc from a year earlier to 1.7mn b/d, according to oil ministry forecasts made before the latest Covid-19 wave. Gasoline use would average 726,000 b/d, jet fuel up by 74pc to 140,000 b/d in 2021-22 and LPG higher by 5pc to 29mn t.
US credit ratings agency Moody's has reduced its GDP growth forecast for India for 2021-22 to 9.3pc from 13.7pc made earlier because of the economic impact of Covid-19, warning of pressure on the country's sovereign rating.
