India Dec diesel use lags pre-Covid level with jet fuel

India's diesel and jet fuel consumption remained below pre-pandemic levels in December as preference for public transport fell . Air travel is yet to recover to 2019 levels on fears regarding the Omicron Covid-19 variant.

Provisional data from the oil ministry showed diesel use of 1.76mn b/d in December was 1pc lower compared with the same time in 2019, while it was up by 9pc on the month and by 2pc on the year.

Jet fuel demand of 140,000 b/d was down by 24pc from December 2019, but was up by 6pc and 29pc on the month and on an annual basis, respectively. The short-term recovery in consumption was echoed by an increase in domestic air traffic and aircraft movement in the country last month, but has started to fall in the past few days due to fears regarding the new Covid-19 variant.

Gasoline consumption, on the other hand, continued to surpass pre-Covid levels on increasing preference for personal transport. Demand in December was 3pc up on the month at 768,000 b/d, while it was up 4pc on the year and 14pc from the same time in 2019.

Oil ministry data on transport fuel was mostly in line with the figures from state-controlled refiners, who account for around 90pc of the country's fuel sales.

State-owned refineries operated at higher capacity in December in anticipation of an increase in fuel demand in the coming months, market participants close to the refiners told Argus.

Demand for bitumen was up by 22pc on the month at 695,000t last month, oil ministry data showed. It was down by 19pc on the year, but 10pc higher than December 2019.

But issues with the disbursement of project payments by the government have weighed on roadworks in recent days.

Consumption of naphtha, which is used in the petrochemical and fertiliser sectors, rose by 1pc on the month to 341,000 b/d last month. But that was 2pc lower on the year and 7pc lower compared with the same period in 2019.

India's overall demand for oil products - including LPG, naphtha, fuel oil and petroleum coke - of about 18.4mn t was up by 8pc on the month, the data showed. It was mostly unchanged from last year but fell by 3pc from pre-pandemic levels.

By Sathya Narayanan