NEW DELHI. A stagnant industrial performance and depressed mobility has resulted into slowing down of India’s fuel consumption for two months in a row, January- February 2023, after the demand skyrocketed in November-December 2022.
While petrol consumption fell by 2 per cent m-o-m to 2.78 million tonnes (mt) in February, diesel usage declined 2.5 per cent m-o-m to almost 7 mt. Similarly, LPG demand was also down 4.6 per cent at 2.4 mt. The consumption of aviation turbine fuel (ATF) was also lower by around 7 per cent m-o-m at 0.62 mt.
The consumption of petroleum products used in industries such as furnace oil (FO) and low sulphur heavy stock (LSHS) was also down on a monthly basis by 5 per cent at 0.57 mt. That apart, the usage of petroleum coke fell marginally by 1.4 per cent to 1.5 mt in February 2023.
Stagnant Demand
Market insiders point to issues such as inflation, rising interest rates, weak external demand and waning domestic pent-up demand exerting some pressure on the momentum in manufacturing activity. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) was at 55.3 in February, with hardly any change from 55.4 in January 2023. Data implied that the domestic market was the main source of new business growth, as new orders from abroad in- creased only fractionally.
S&P pointed out that suppliers’ capacities seemed adequate to keep up with improving input demand, as signalled by stable vendor performance. The seasonally adjusted Suppliers’ Delivery Times Index was at the 50.0 no-change mark in February.
A senior oil marketing company (OMC) official said that industrial activity has been slightly subdued in the last two months. For instance, mining, road as well as rail freight was slightly down on an annual basis in February 2023.
“This, to some extent, was neutralised by higher vehicle registrations and steel demand. There was less fuel requirement for irrigation as Rabi sowings are nearing harvest. These factors reflect in lower diesel consumption, the mainstay of irrigation and transport. Besides, tourism and marriage seasons are over, which reflects in the decline in demand for petrol,” he explained.
