India's fuel sales rise in April as agriculture demand picks up

India's fuel sales rose in April as diesel demand grew on the back of a pick up in harvesting of Rabi crops and expansion of economic activity, preliminary industry data showed on Monday.

Demand for diesel, the most consumed fuel in the country accounting for about two-fifths of the demand, soared 6.7 per cent to 7.15 million tonnes in April compared to a year ago period.

Month-on-month sales rose 4.8 per cent when compared with 6.83 million tonnes of diesel consumed in March which witnessed a seasonal slowdown.

Petrol sales rose about 2.5 per cent to 2.64 million tonnes during April when compared with the same period of the last year. Sales, however, fell marginally by 0.5 per cent month-on-month, the data showed.

Petrol and diesel sales have been on the rise from the second half of March on the back of a pick up in industrial and agriculture activity. In the first half of March, petrol sales had fallen 1.4 per cent and diesel by 10.2 per cent year-on-year.

Consumption of petrol in April was 23.5 per cent more than COVID-marred April 2021 and more than double in the same period of 2020. Diesel consumption was up 21 per cent over April 2021.

With the continued opening of the aviation sector, India's overall passenger traffic at airports inched closer to pre-COVID levels.

Reflecting the trend, jet fuel (ATF) demand jumped 15.4 per cent to 595,600 tonnes during April when compared to the same period last year. It was 53.3 per cent higher than April 2021 but 4 per cent lower than pre-Covid April 2019. Month-on-month sales fell 3.1 per cent when compared with 614,700 tonnes in March 2023.

Rabi crops, mostly wheat, barley, mustard, sesame and peas, are sown between the months of October and December, and harvested from April to June. Wheat harvesting leads to a rise in diesel demand as harvesters and tractors run on that fuel.

India is enjoying steady growth, with support from the services sector as well as the industrial side of the economy. The country's oil demand was supported by strong industrial activity, industry officials said.

In terms of products, diesel was the main driver of oil demand as there was a pick up in the agriculture sector, as well as requirements for power generation and industry. Use of the fuel in irrigation pumps and trucking supported diesel, they said.

Cooking gas LPG sales fell 2.7 per cent year-on-year to 2.19 million tonnes in April. LPG consumption was 4 per cent higher than in April 2021 and 16 per cent more than pre-Covid April 2019. Month-on-month, the demand dropped 8.1 per cent when compared to 2.38 million tonnes of LPG consumption during March, the data showed.