India's fuel sales soar in May on summer travel

‘Harvesting season, price cuts too help’

India's petrol and diesel sales soared in May on the back of a surge in summer travel to escape from the heat and vacation during annual breaks at educational institutions, preliminary industry data showed on Wednesday.

Petrol sales by state-owned fuel retailers, which control roughly 90% of the market, at 2.8 million tonnes in May was 55.7% higher a year earlier when a devastating second COVID-19 wave wreaked havoc on the economy.

Consumption was 76% higher than the demand in May 2020 and 12% more than the 2.5 million tonnes sold in the pre-COVID May 2019. Month-on-month sales were up 8.2%, as per preliminary data.

Diesel, the most-used fuel in the country, saw sales jumping 39.4% year-on-year to 6.82 million tonnes in May. This was, however, 2.3% lower than sales in May 2019. It was 1.8% higher than the 6.7 million tonnes consumed in April this year.

Industry sources said consumption in May is higher because of demand returning after high prices in the previous month impacted sales. Also aiding the demand was the start of the harvesting season.

Another factor was the low base effect. April saw consumption drop due to a ₹10 per litre increase in petrol and diesel prices after a more than four-month hiatus.

But the biggest factor seemed to be an increase in travel to colder regions to escape from record high temperatures and utilise annual breaks at schools, the sources said.