India's fuel demand makes shaky start to 2021

[NEW DELHI] Indian energy demand got off to a shaky start in the new year with sales of transport and cooking fuels over the first two weeks of 2021 declining from a month earlier.

The sale of diesel - the country's most-used fuel and a proxy for economic health - dropped during Jan 1-15 by 6.6 per cent from the same period in December and 3.5 per cent from a year earlier, according to people familiar with preliminary data from the country's three biggest retailers. Sales of gasoline, jet fuel and liquefied petroleum gas also declined month-on-month.

Motor fuel sales, however, were still 8.5 per cent higher from a year earlier, with people favoring greater use of personal vehicles to avoid public transport as the nation struggles to contain the Covid-19 outbreak. LPG, used for cooking and heating, also posted a year-on-year gain amid plunging temperatures.

India's overall petroleum demand slid in 2020 for the first time in more than two decades after the pandemic led to lockdowns and social-distancing guidelines that crushed energy consumption. Easing coronavirus restrictions and festival demand helped to boost demand toward the end of last year, but consumption has since eased.

Spokespeople at Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp. couldn't immediately comment on the provisional data. The three retailers account for more than 90 per cent of India's fuel sales.

BLOOMBERG