State retailers sold 50 per cent less refined fuel in the first two weeks of April than the same time a year ago as a nationwide lockdown to stem the spread of the new coronavirus hit transportation and industrial activity, industry sources said.
State companies – Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation – own about 90 per cent of the country’s retail fuel outlets.
Diesel sales by state retailers in the first 15 days of April dropped by 61 per cent from a year earlier while petrol and jet fuel sales declined by 64 per cent and 94 per cent respectively, according to provisional industry data provided by two sources, who asked not to be named.
The country’s overall refined fuel demand includes consumption of fuel oil, bitumen and liquefied petroleum gas (LPG).
State-retailers sold 21 per cent more LPG in the first fortnight of April from a year earlier. The government is providing free cooking gas cylinders to the poor for three months to June to help them weather the impact of the lockdown.
It has extended the overall lockdown until May 3, but has announced a roadmap to restart some industrial activity after April 20 in locations that are not coronavirus hotspots to try to revive the economy.
The International Energy Agency (IEA) in its latest report said the country’s annual fuel consumption – a proxy for oil demand – will decline 5.6 per cent in 2020 compared with growth of 2.4 per cent forecast in its March report.
It estimates the country’s petrol demand will decline by 9 per cent, while diesel will drop by 6.1 per cent.
The slump in fuel demand has already forced some refiners to halve crude processing and increase prompt exports of refined fuels.