Government of India, India, Petrol, Petrol & Diesel

Data: Consumption of Petrol picks up in Q2 of 2020-21, but not Diesel


The data for consumption of petroleum products indicates that the overall consumption of petroleum products has slightly improved in Q2 of 2020-21 compared to the first quarter. While the consumption of Petrol has picked up during July to September 2020, the consumption of Diesel is yet to get to back the pre-lockdown levels.

In an earlier story, we looked at the trend in consumption of petroleum products during the first quarter of financial year 2020-21, which was also the time when the nationwide lockdown was imposed. We had also observed that there was a fall in imports, of mainly petroleum products, during the first quarter of 2020-21 on account of reduced demand. Industrial activity, vehicular movement, and other economic activities were severely restricted during the lockdown months. However, in the second quarter of 2020-21 from July to September 2020, the restrictions in most of the sectors were eased, and economic activity has picked up. We look at the consumption of petroleum products during the second quarter of 2020-21 and analyse if the demand has picked up. 

The data for this story is collated from the Petroleum Planning and Analysis Cell (PPAC) of the Government of India. PPAC’s mandate is to analyse the trends in the international oil market and domestic prices, forecasting and evaluation of petroleum import and export trends.

Consumption of petroleum products in Q2 of 2020-21 is 11.3% lower than in Q2 of 2019-20

As is evident from the subsequent chart, the total consumption of petroleum products such as petrol, diesel, petroleum coke, LPG, bitumen, Naphtha, and other petroleum products in the second quarter of 2020-21 (from July to September 2020) has reduced by over 11.3% compared to the same period in 2019-20. Similar trend is observed in the monthly consumption for July, August, and September 2020. 

The overall consumption in Q2 of 2020-21, was around 455 lakh metric tonnes (LMT) which is less than the consumption during July to September 2016 when it was around 473 LMT. The consumption in September 2020 is around 155 LMT, the lowest in the last four years. 

The consumption in July 2020 had dropped by 13.3%, and in August 2020 by 15.8% over the corresponding months in 2019. In the month of September 2020, the consumption dropped by 4.47% compared to 2019, implying that the consumption may be on the recovery path. 

Consumption of LPG has increased in Q2 of 2020-21 

The overall consumption of petroleum products in Q2 of 2020-21 is lower than the consumption during the same period in 2019-20, which looks like the continued impact of the lockdown during Q1 of 2020-21.  However, the consumption trend has improved compared to the first quarter of 2020-21. 

Comparison of the product wise consumption in Q2 of 2019-20 and 2020-21 indicates that consumption of Petrol has reduced by 5%, Diesel by 15.7%, and petroleum coke by 16.3%. However, the consumption of LPG has increased marginally. These four products alone account for three-fourth of the consumption of petroleum products in Q2 of 2020-21. 

Diesel consumption is yet to recover

The demand and consumption of Diesel has been constantly increasing over the years as it fuels the trucks, trains, buses, and major industrial activity. With the growth in economy, the consumption of Diesel has also grown.  Traditionally, Diesel accounts for almost two-fifth the consumption of all petroleum products in India.  

Compared to 48.5 LMT in August 2020,  the consumption of Diesel increased to 54.9 LMT in September 2020. However, the consumption was still lower than that in September 2019 by nearly 6%. In fact, the consumption of Diesel in August 2020 was the second lowest in the last 10 years. 

The total consumption of 158.5 LMT between July & September 2020 is back to the 2014 levels when it was 157.6 LMT. 

Consumption of Petrol in September 2020 is higher than that in September 2019

Unlike in the case of Diesel, consumption of Petrol in the month of September 2020 has increased by 3% compared to September 2019. But the overall consumption in Q2 of 2020-21 (July to September 2020) is lower than that in Q2 of 2019-20. 

The demand for Petrol was more or less back to pre-lockdown levels in September 2020. The consumption of Petrol September 2020 (24.5 LMT) is the highest in the month of September in the last ten years. 

The difference in consumption patterns of Petrol & Diesel can be gauged by the fact that the consumption of Petrol during July to September 2020 reduced by around 5% compared to the same months in 2019 while the drop in the case of Diesel is 15.6%.

Consumption of LPG has increased

Unlike the other petroleum products, the consumption of LPG had increased even when the lockdown was in force. In quarter one of 2020-21, from April to June 2020, the consumption of LPG had increased by over 13.3% as compared to the corresponding period in 2019-20. Similarly, even in Q2, the consumption of LPG has increased from 67.85 LMT in Q2 of 2019-20 to 68.05 LMT in Q2 2020, the highest in the last ten years. This could be due to a significant increase in domestic LPG demand as eating out has reduced. 

Consumption of ATF and coke is yet to pick up 

Apart from Petrol, Diesel, and LPG which are used even by retail consumers, the consumption of coke, which is widely used in industries as an energy alternative has dropped significantly in the months of August and September in 2020 compared to the same months in 2019. However, there has been an overall decline in its consumption since 2017 due to restrictions imposed in its usage out of pollution concerns. Consumption of Aviation Turbine Fuel (ATF),  used by airlines and helicopters has improved compared to the previous months as the aviation sector opened up.  However, ATF consumption in the last three months is not on par with the consumption of previous years since airlines have started only partial operations. 

Increased use of private vehicles may have increased the demand for Petrol

One probable reason for the increase in the consumption of Petrol may be the increased usage of private vehicles. Public transport like buses & trains have not resumed in full capacity in most places. Also, it looks like people have preferred the use of private vehicles than public transport since the risk of infection is lower. 

Since public transport & other economic activity have not fully resumed, the consumption of Diesel has not yet recovered and back to the pre-lockdown level. Since the price of diesel, which was once significantly less than that of petrol, is now on par, the demand of Petrol fuelled vehicles could also be a reason behind the contraction in the demand for diesel. 

India is third largest consumer of oil in the world

According to the World Energy Outlook 2020, published by International Energy Agency, India will lead the energy demand in the world over the next ten years. India currently is the third largest consumer of oil in the world after USA and China, as per 2018 figures.

As per a response of the government in Lok Sabha,  it has been pushing for the use of green and clean fuels. The CNG gas coverage has been increased. The Railways Ministry made an announcement this year that the railways would be fully fuelled by electricity by 2024. Further, the government is also taking measures to shift to hydrogen fuel cell powered public transport

While the government is working towards reducing the dependence on imports to meet the domestic demand for oil, the unprecedented variation in demands and consumption of these fuels pose a challenge to the refineries.


About Author

A bachelor’s degree in mathematics and master’s in social science, she is driven by ardent desire to work with this unique combination to create her own path instead of following the herd. Having served a stint as the college union chairperson, she is a strategist who is also passionate about nature conservation, art and loves solving Sudoku.

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