Fuel consumption in India decreased in November after reaching a seven-month high the previous month, according to government statistics released on Thursday, as demand in the world’s third largest oil consumer subsided following the festival season.
Fuel consumption, a proxy for oil demand, fell 4% from October to 17.13 million tonnes, and was 11.4 percent lower than a year ago, according to data from the energy ministry’s Petroleum Planning and Analysis Cell.
As festivals boosted mobility and economic activity, fuel demand rose to a seven-month high in October, while gasoline sales soared to an all-time high.
“Seasonal variables” are to blame for the drop in demand, according to Ed Moya, senior market analyst at brokerage OANDA.
“However, the outlook for petrol demand in 2022 remains bright, as Covid has had little impact on the country and there is a good growth outlook based on ongoing reopening momentum.”
With the celebration of Diwali, a festival of lights, India’s festival season came to a close in early November.
Diesel consumption, which accounts for nearly 40% of India’s refined fuel sales, down 1.7 percent month on month to 6.51 million tonnes, down 14% from November 2019.
Diesel sales were down 7.6% compared to the same period the previous year.
Petrol sales fell 0.7 percent year on year to 2.65 million tonnes, but were 4.4 percent higher than November 2019. In comparison to October, they were down 3.6 percent.
Last month, India, Asia’s third-largest economy, said that it will release 5 million barrels of oil from its strategic reserves in collaboration with foreign purchasers such as the US, China, Japan, and South Korea.
Sales of cooking gas, also known as liquefied petroleum gas (LPG), dipped about 0.4 percent year over year to 2.34 million tonnes, while sales of naphtha fell 19.4 percent to 1.13 million tonnes.
In November, sales of bitumen, which is used to pave roads, fell 21.5 percent, while fuel oil use increased 3.9 percent.
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