Petrol, Diesel Sales Surge Amid Erratic Monsoon Rains, LPG Demand Shifts Towards Piped Gas

New Delhi: Petrol and diesel sales by India's three state-run fuel retailers surged in August as erratic monsoon rainfall boosted fuel demand from farmers and motorists, preliminary industry sales data showed on Tuesday.

Petrol sales by Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) soared 9.1 per cent to 3.48 million tonnes in August, compared with 3.19 million tonnes in the corresponding period a year ago.

The surge in August follows a 9.7 per cent year-on-year growth in July.

The August volume was also 14 per cent higher than 3.05 million tonnes sold during August 2024 and 30.7 per cent above the level recorded in the same period of 2023.

Month-on-month, petrol sales were up by almost a percentage to 3.45 million tonnes.

Diesel sales, a key indicator of economic activity in India, rose 10.2 per cent year-on-year to 6.27 million tonnes in August from 5.69 million tonnes a year earlier.

August is the second month in a row of double digit growth in diesel demand. Sales were up 10.7 per cent in July.

Diesel is India's most widely used fuel, powering freight transport, agricultural machinery and irrigation. Erratic monsoon rainfall boosted irrigation demand during the peak sowing season.

The volume sold in August was 9.7 per cent higher than in the corresponding period of 2024 and 6.3 per cent above the August 2023 consumption. On a month-on-month basis, diesel sales however fell 12 per cent from 7.13 million tonnes in July.

Fuel sales typically moderate with the onset of the monsoon, which reduces demand for running agricultural irrigation pumps as well as slows vehicular movement. But this year, the monsoon rains arrived late, which led to farmers using diesel to run pumps to irrigate farms.

Jet fuel (ATF) sales rose by 5.6 per cent to 677,100 tonnes during August -- volumes that were 5.9 per cent more than the consumption of 639,700 tonnes in August 2024 and 17.7 per cent more than 575,400 tonnes in August 2023.

Month-on-month, the consumption was up 1.3 per cent from 668,500 tonnes in July.

Liquefied petroleum gas (LPG) sales continued to fall, dropping 16.1 per cent to 2.42 million tonnes. LPG demand had fallen 17.4 per cent in July.

Industry officials said this was largely because some volumes have shifted to piped natural gas since the West Asia crisis.

LPG sales have been declining since the onset of the West Asia crisis disrupted supplies, leading to the imposition of consumption restrictions in sectors like hotels and restaurants.

The curbs were lifted in June, when sales saw an 8.6 per cent increase to 2.18 million tonnes but were lower year-on-year as some industrial and commercial users are now using piped natural gas for their needs, they said.

The August LPG consumption was 12.6 per cent lower than 2.77 million tonnes of August 2024 and 0.3 per cent lower than 2.43 million tonnes of August 2023. Month-on-month LPG sales were up 2.2 per cent to 2.37 million tonnes, the data showed.

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