NEW DELHI: India’s diesel consumption increased 7% from a year ago in the first fortnight of March but demand for LPG, or household cooking gas supplied in cylinders, dropped more than 3% to coincide with a steep rise in refill prices and removal of subsidy.
Data from state-run fuel retailers, who dominate 90% of the market, show petrol sales rising over 5% from a year ago, boosted by car sales snapping the pandemic blues in February and people going back to using their personal vehicles on resurgence of Covid-19 cases in several states.
This is the first yearly growth in diesel sales since October 2020, reinforcing the view that the economy is on its way to recovery as its consumption is one of the key indicators of economic activity.
In February, diesel demand had slid 8% and petrol consumption declined 2% in February from a year ago. In December, sales had for the first time since October recorded a monthly decline at 6%.
Jet fuel sales were down more than 36% from a year ago in March fortnight. However, this can be seen as a sign of recovery since February when consumption was more than 40% lower than the pre-pandemic level.
The economy stepped out of recession in the December quarter, posting a growth of 0.4% as economic activities in terms of movement of people, raw materials and finished products picked up.
The fall in LPG consumption is surprising since this is the only fuel to remain in the positive territory in terms of growth in sales. While an early onset of summer in parts of the country could be one reason, the impact of a Rs 125-per cylinder price in February and simultaneous loss of subsidy cannot be ruled out.