India's fuel demand is beginning to flatline after showing signs of returning to life, as consumption dipped 11.7 per cent in July, official data showed.
Fuel consumption, a barometer of economic activity in the country, had slumped by over 45 per cent in April as nationwide lockdown halted most vehicular traffic and shut industries. However, with easing of lockdown restrictions, the demand picked up in May and June with month-on-month increase in consumption numbers.
However, mini-lockdowns imposed by states to contain the spread of coronavirus seemed to have stopped this recovery, with fuel demand falling 3.5 per cent in July over the previous month.
Fuel demand fell to 15.67 million tonnes in July, 11.7 per cent lower compared with 17.75 million tonnes consumption in the same month a year ago, and 3.5 per cent lower than the June sale of 16.24 million tonnes.
Consumption of diesel, which accounts for about two-fifth of India's overall fuel usage and is the most used fuel for transportation and irrigation, fell 19.25 per cent to 5.52 million tonnes in July from a year earlier, data released by the Petroleum Planning and Analysis Cell (PPAC) of the Oil Ministry showed.
Diesel usage in July was lower than 6.3 million tonnes consumption in June.
Petrol demand fell 10.3 per cent from a year earlier to 2.26 million tonnes, and by 0.8 per cent from 2.28 million tonnes in June.
On Tuesday, government data showed slump in factory output easing in June to 16.6 per cent from 30 per cent contraction seen in May and over 50 per cent fall in April.
Naphtha demand fell 12.3 per cent to 1.28 million tonnes in July from a year earlier, but rose 10 per cent from June. Sale of bitumen, used for making roads, slipped 4.4 per cent on an annual basis to 3,89,000 tonnes, and by about 45 per cent month-on-month.
Cooking gas LPG is the only fuel that has seen rise post-outbreak of the COVID-19 pandemic, mostly because the government doled out free cylinders to poor to minimise hardships caused by the pandemic.
LPG sales rose 2.3 per cent in July to 2.27 million tonnes.