India's fuel demand falls in July as monsoon sets in

The arrival and intensity of monsoon weighs heavily on diesel demand in India

India's demand for petrol and diesel fell in the first half of July over the previous month as the onset of monsoon chipped away consumption in some sectors and restricted mobility, preliminary industry data showed on July 17.

Diesel, the most widely used fuel in the country, saw consumption drop 13.7% during July 1-15 to 3.16 million tonnes from 3.67 million tonnes demand in the same period of the previous month.

The arrival and intensity of monsoon weighs heavily on diesel demand in the country and consumption traditionally is lower in July-September than in April-June. Floods restrict mobility and demand from the farm sector, which uses diesel in irrigation pumps and trucking, also drops with the onset of rains.

Diesel demand was however almost 27% higher year-on-year, supported by strong economic growth and a relatively low baseline for the same period in 2021 when a second wave of COVID-19 had impacted the economy.

Consumption of diesel was 43.6% higher than the 2.2 million tonnes demand during July 1 to 15 of 2020. It was 13.7% more than pre-COVID July 2019, the data showed.

Petrol sales fell 7.8% to 1.27 million tonnes in the first half of July when compared to 1.38 million tonnes consumption in the same period of the previous month.

The consumption was, however, 23.3% higher than July 2021 and 46% more than the first fortnight of July 2020. It was 27.9% more than pre-COVID July 2019.