Provision sales data for the first fortnight of the month show drastic slump in excess of 60% for all the three transportation fuels. Petrol sales dropped 64%, diesel 61% and jet fuel a whopping 94% from their year-ago levels. Only LPG, the cooking fuel for 83% households, has shown a growth of 21% in this period as the government began supplying free refills to 8 crore poor homes under a Rs 1.7 lakh crore relief package to help economically weaker sections tide over the world’s biggest lockdown.
The fall in fuel consumption in the world’s third-largest oil buyer spells bad news for the world grappling with a flood of oil amid a decline in demand all around due to the coronavirus pandemic. Since the lockdown began on March 25, Indian refiners have scaled down their operations and may have to put units in “circulation” mode where oil is kept flowing through the columns without processing to avoid a lengthy and often costly process to restart plants.
They are pinning their hopes on certain relaxations at restarting economic activities from April 20 to revive some demand. But still, they see demand halved in April when the data for the full month comes in.
All the three state-owned refiners have rejigged operation at suitable refineries to maximise LPG output in view of the higher demand. IndianOil has also tied up additional shipments of LPG from Saudi Arabia and UAE.
International Energy Agency and Opec have earlier this week projected 2020 to be the worst year for the oil market in the history, though they differed on the degree of the slump in demand.