India’s petrol, diesel sales improve in May, full recovery months away

India’s gasoline and gasoil gross sales jumped sharply in May in contrast with April, in a restoration from historic lows after a partial easing of the lockdown imposed to curb the coronavirus pandemic, provisional gross sales information confirmed on Monday.

But trade analysts anticipate a full-scale restoration to pre-Covid-19 consumption ranges in India to be months away because the monsoon season approaches whereas manufacturing actions stay low and transportation demand takes a success in some components of the nation.

State-retailers’ gasoline gross sales in May rose by about 83% from April to about 1.6 million tonnes. Sales of gasoil, which accounts for about two-fifths of the nation’s total gas gross sales, rose by about 69% in May in contrast with April to 4.Eight million tonnes, provisional gross sales information from state gas retailers confirmed.

However, gasoline and gasoil gross sales in May are nonetheless down by about 36% and 31% respectively from a 12 months earlier, after contracting greater than 50% in April 12 months on 12 months.

State corporations Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum personal about 90% of the retail gas retailers in India.

The sources who supplied the provisional trade information requested to not be recognized citing confidentiality.

Sales of liquefied petroleum fuel (LPG) rose 13% in May from a 12 months in the past whereas jet gas declined by 85% throughout the identical interval.

“April likely marked the nadir with diesel demand slumping by more than 50% y-o-y,” mentioned Emma Richards, senior oil & fuel analyst at Fitch Solutions.

Fitch expects India’s 2020 diesel demand to say no by 14% from a 12 months in the past, and sees a full-scale restoration in gas demand in 2021-2022.

The June-September monsoon season and Covid-19 associated disruptions will cap India’s oil consumption within the third quarter, Richards mentioned.

FGE Energy analyst Senthil Kumaran mentioned India’s gasoline consumption might return to pre-Covid stage by October however gasoil demand would get well solely in the direction of the top of the fourth quarter of this 12 months.

“Manufacturing will be the key basis for a spur in gasoil demand but we don’t see that picking up to the full level until end of this year,” Kumaran mentioned.

Gasoil demand will contract by 8% in July-December versus the identical interval a 12 months in the past after which develop 7.7% in first quarter of 2021, he mentioned.

FGE expects India’s total gas demand to develop by 3% within the first quarter of 2021 from a 12 months in the past.