Lockdowns derail Indian fuel demand recovery in July

A short-lived recovery in India's transport fuel demand ended in July, as localised lockdowns were imposed across the country to counter a record surge in Covid-19 cases.

Gasoline use was 553,000 b/d in July, down by 4pc from 575,000 b/d in June, according to data from state-controlled refiners that account for around 90pc of India's fuel market. Diesel use fell by 15pc to 1.17mn b/d from 1.37mn b/d, while jet fuel consumption edged up to 56,000 b/d from 53,000 b/d in the same comparison.

Fuel use rose on a month-on-month basis in both May and June, after the government started to ease a strict nationwide lockdown that was imposed in late March. But the recovery ground to a halt last month as India's coronavirus outbreak worsened, forcing local governments to impose new restrictions.

July demand remains well below year-earlier levels. Indian gasoline sales averaged 688,000 b/d, diesel sales averaged 1.65mn b/d and jet fuel sales averaged 168,000 b/d in July 2019, according to oil ministry data that includes figures from private-sector refiners. LPG demand was 2.28mn t in July, up slightly from 2.22mn t a year earlier.

Jet fuel demand has been hit by restrictions on domestic flights, coupled with the public's reluctance to fly. International travel is banned until 31 August.

Cases of Covid-19 are surging in India, with over 52,000 new cases daily despite testing rates that are lower than in many other countries. Confirmed cases total nearly 1.9mn, behind only the US and Brazil, prompting the government to extend partial lockdown measures until 31 August.

By S Dinakar