As most of the small and medium scale industries have started operations from 20th April, the normal consumption level of petrol and diesel is likely to be achieved by July 2020.
Travel restrictions on the movement of people and goods, coupled with the standstill economic activities led to a steep fall in the demand of petrol and diesel, however, their demand has once again started to pick up due to ease in the restrictions of lockdown. “Oil Marketing Companies’ (OMC) sales of petrol and diesel are showing signs of demand revival in the second half of April 2020,” Yogesh Patil, Senior Research Analyst – Oil & Gas at Reliance Securities, told Financial Express Online. The sales of petrol, diesel and jet fuel have reduced by 70 per cent in the month on a YoY basis, he added.
Except for LPG, almost all kinds of fuel took a hit amid lockdown as the factories were closed and the travel restrictions were imposed. However, ease in the restriction of lockdown from April 20 has supported the oil demand to slightly recover in the last 10 days of the month.
It is further expected that the recovery will be much more in May as more restrictions have been eased from today. Ease in the lockdown of green and orange zones from 4th May will improve petrol and diesel consumption for the month of May ’20 and as the railway is the biggest institutional consumer of diesel, we will have to wait for the start of normal operations of railway, Yogesh Patil added.
As most of the small and medium scale industries have started operations from 20th April, we believe petrol and diesel normal consumption level to touch in the month of July’20 only, he further added. Meanwhile, the falling fuel demand across the globe has brought turbulence in the oil prices and supply. However, even as the global crude prices are flooring, the retail prices of petrol and diesel are maintained at nearly older rates as the government takes more benefit by increasing the duties of fuel.