However, products consumed in the month was about 47% higher than April, reflecting higher usage with the gradual easing of travel restrictions.
Domestic consumption of petroleum products in May fell 23% year-on-year (y-o-y) to 14.7 million tonne (MT) on muted sales of transportation fuels amid the country-wide lockdown to contain the outbreak of the coronavirus. However, products consumed in the month was about 47% higher than April, reflecting higher usage with the gradual easing of travel restrictions.
According to provisional data by the government’s petroleum planning and analysis cell (PPAC), diesel usage dipped 29% annually to 5.5 MT in May, while demand for the aviation turbine fuel (ATF) fell 84% to 111 thousand tonne in the month. Petrol sales fell 35% to 1.8 MT in May. Consumption of bitumen, mostly used in road construction, dropped 21% y-o-y to 571 thousand tonne.
Domestic natural gas production fell 15.9% to 2,299 million metric standard cubic metre (MMSCM) in May. The 2.6 million tonne (MT) of crude oil produced in the country in the month was also 6.9% lower than the production from a year-ago period. Domestic production has been falling with the ageing of existing fields and muted response from the industry to take up new projects, mainly due to lack of adequate incentives.
Rising consumption of products in May is a positive development for the Union government, which has sharply increased auto fuel taxes by Rs 10/litre on petrol and Rs 13/litre on diesel in early May. In mid-February, the Centre had also hiked taxes on both these fuel by Rs 3/litre to shore up more revenues. With the rising sales, state-run refiners Indian Oil Corporation (IOCL) has ramped up capacity utilisation at its refineries from about 55% of rated capacity in the beginning of May, to about 78% by the month end, to the current level of 83%.
Liquefied petroleum gas (LPG) was the only product which registered growth of 13% to 2.3 MT in May, mainly due to government scheme of free cylinder refills for poor households and higher domestic consumption of LPG cooking gas. The requirement of furnace oil (FO) and low-sulphur heavy stock (LSHS) fuel — which are predominantly used in industrial applications — fell 7% to 479 thousand tonne.