India\u2019s consumption of diesel, the mainstay of transport and logistics sector, fell for second consecutive month in July, while the usage of petrol was almost flat on a monthly basis as rains impacted mobility.<\/p>\n
According to the Petroleum Planning and Analysis Cell (PPAC), India\u2019s diesel consumption fell by almost 10 per cent on a provisional basis to 7.19 million tonnes (mt) during July 2024. However, the usage was higher by 4.4 per cent on an annual basis.<\/p>\n
In the case of petrol, the consumption during July this year stood at 3.286 mt against 3.285 mt in June 2024. On an annual basis, the consumption was higher by more than 10 per cent.<\/p>\n
\nMonsoon impact
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Analysts said that the June-September monsoon period historically witnesses a decline in mobility. The industrial and mining activity declines during monsoons which has a bearing on the transport sector for ferrying minerals and products. Subsequently, transport activity also declines.<\/p>\n
However, the consumption of aviation turbine fuel (ATF) rose by 3.58 per cent m-o-m and 9 per cent y-o-y to 7,23,000 tonnes last month, on the back of growing domestic and international travel.<\/p>\n
India\u2019s petrol and diesel consumption broke all past records in May 2024 aided by higher demand for auto fuels due to campaigning and voting in the ongoing Lok Sabha elections and the beginning of summer vacations.<\/p>\n
Diesel consumption rose to a record 8.4 mt in May 2024 compared to the previous record of 8.2 mt in May 2023. Petrol usage rose to 3.5 mt against the previous high of 3.4 mt in May 2023.<\/p>\n
Fitch Ratings, in a June 2024 report, said that it expects India\u2019s petroleum product demand to rise by 3-4 per cent in the financial year ending March 2025 (FY25).<\/p>\n
The increase will be supported by rising consumer, industrial and infrastructure demand alongside our expected GDP growth of 7 per cent.<\/p>\n
\u201cWe believe the growth will be broad-based, although diesel and petrol will continue to account for over half of consumption. Overall demand grew by 5 per cent in FY24 and 2 per cent in the first two months of FY25,\u201d it added.<\/p>\n