India's fuel sales rise above pre-COVID levels

India's fuel sales surged past pre-pandemic levels in March on the twin impact of the economy rebounding from the lifting of pandemic-related restrictions and anticipation of price increases leading to stocking. In the first two weeks of March, dealers, as well as the public, topped up their tanks in anticipation of an increase in prices that had been on hold in the run-up to the elections in states like Uttar Pradesh.

While daily price revisions restarted on March 22, the increases were calibrated. The price increases moderated the consumption. Petrol sales by state-owned fuel retailers, which control roughly 90 percent of the market, at 2.69 million tonne during March were nearly 8.7 percent higher than the same period last year and 14.2 percent higher than the period in 2019, preliminary industry data showed.

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Diesel, the most-used fuel in the country, saw sales jumping 10.1 percent year-on-year to 7.05 million tonne. This was 5 percent higher than sales in March 2019. Petrol and diesel sales had risen 18 percent and 23.7 percent respectively in first half of March when most of the hoarding on price hike expectations took place.

While petrol sales were 38.6 percent higher than the sales during March 2020, diesel sales were up 41.6 percent over the same reference period. Month-on-month, petrol sales were up 17.3 percent and diesel sales surged 22.3 percent.

Diesel sales during March are the most in any month in the last two years and more than the total volume of diesel sold in April 2020 when the country was under a complete lockdown. Industry sources said, while there was a panic buying by individual vehicle owners, petrol pump dealers topped up not just their storage tanks but also any mobile browser or tanker truck they had. The dealers hoped to make a quick buck by buying fuel at a lower rate and selling at revised higher prices.

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Petrol and diesel prices hit the freeze button just as electioneering for five states including Uttar Pradesh picked up in early November 2021. The record 137-day freeze ended on March 22 and since then petrol and diesel prices have risen by Rs 6.4 per litre each. Jet fuel (ATF) sales rose 9.8 percent to 491,200 tonne in March but were 27.6 percent less than pre-COVID levels of 2019. They were, however, 7.5 percent more than sales in the same period in 2020.

ATF sales are expected to pick up with the complete opening up of air travel last week. India went in for a complete lockdown, stopping flights, halting rail and road movements and shutting businesses, in the last week of March 2020, to contain the spread of coronavirus. The March 2020 period was near normal as COVID restrictions were just kicking in.

LPG sales were up 12 percent to 2.53 million tonne in March, the data showed. Cooking gas sales moderated after a Rs 50 per cylinder hike in prices on March 22. LPG sales had risen by 17 percent in the first half of March.