Petrol, diesel top the sales list in May

Amidst the soaring Petrol, Diesel prices Indian consumption of these fuels hit the record sales in May. This pushed the country’s overall fuel consumption as per the data from Petroleum Planning and Analysis Cell(PPAC) of the Oil Ministry showed.

Fuel consumption, a proxy for oil demand, totalled 18.72 million tonnes last month, during which diesel sales soared to 7.55 million tonnes and petrol consumption climbed to 2.46 million tonnes — the highest monthly sales figures in PPAC data going back to April 1998.

During January-May this year, India, the world’s third-largest oil consumer used 35.2 million tonnes of diesel which is 6% more than the corresponding period last year. The country’s monthly diesel sales have averaged 7.05 million tonnes in 2018, compared with a monthly average consumption of 6.6 million tonnes last year.

Sales of petrol rose 7.6% in May from April and are up 2% from the same month last year. Monthly demand for petrol has averaged 2.27 million tonnes this year, up 7% from the 2017 average of 2.12 million tonnes.

Analysts told the Reuters news agency that the diesel consumption growth during the calendar year of 2018 might be more than double from last year. This has been aided by an expected regular monsoon that should boost demand for diesel used in harvesting, while the government targets massive infrastructure spending.

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More than half of India’s farming sector depends on diesel to fuel pumps for land irrigation.

Country’s capacity to export diesel may be capped due to higher domestic consumption in India.

India’s diesel exports from March to April this year were 3.79 million tonnes, down 22% from 4.87 million tonnes of the industrial fuel exported during the same time last year. Last month, petrol and diesel pump prices in India surged to record highs, raising pressure on Prime Minister Narendra Modi’s government to find a solution to provide relief to consumers without taking a hit on its finances. The recent rise in global crude prices was largely behind the surge in domestic prices.