India was beneath one of many world’s strictest lockdowns in May final yr, which introduced all mobility and financial exercise to a grinding halt.
This yr, although the an infection fee is way extreme, restrictions are localised. Personal mobility isn’t as hampered as final yr and extra factories have remained open whereas cargo motion between states too hasn’t been as badly affected.
Petrol consumption at 1.99 million tonnes in May was up 12 per cent over the earlier yr, it was down 16 per cent over April and 27 per cent over the pre-COVID period. Diesel gross sales have been up marginally to 5.53 million tonnes year-on-year however have been down 17 per cent over April and 29 per cent over the pre-COVID interval.
With journey restrictions curbing airline operations, ATF gross sales fell by 36 per cent to 2,63,000 tonnes month-on-month however have been greater than double of 1,10,000 tonnes consumption in May 2020. Pre-COVID ATF demand was 6,80,000 tonnes.
Sales of home cooking gasoline LPG, the one fuel to have proven development in consumption in the course of the top of the primary nationwide lockdown, was virtually flat at 2.16 million tonnes in comparison to the earlier month, however was 5.5 per cent decrease than the final yr. It was, nonetheless, 5.5 per cent greater than pre-COVID May 2019.
This is as a result of the federal government gave free cylinders as a part of the COVID-19 reduction bundle. Consumption of bitumen, which is used in highway building and is an indicator of financial exercise, was down 19 per cent month-on-month and close to 10 per cent year-on-year.
India’s new coronavirus circumstances have fallen from over 4 lakh to 91,702 and deaths from the an infection dropped to 3,403 from over 4,000 a number of weeks again, in accordance to the well being ministry information. “We were near pre-COVID level in March 2021, but new restrictions due to the second COVID-19 wave have temporarily reduced the demand for both personal mobility and industrial goods movement,” an trade official stated.
“Local fuel consumption will start to look up this month when the second pandemic wave is expected to weaken.” Declining fuel gross sales lowered crude consumption by refiners, lowering the working run fee by 85-86 per cent. OPEC in its month-to-month oil market report noticed India’s oil demand climbing by 10.82 per cent to 5 million barrels per day in 2021.
“Daily new COVID-19 cases increased in May, forcing states to implement lockdowns and other restrictions that led to a steep decline in mobility,” it stated. “As COVID-19 cases come under control and restrictions are eased towards 3Q21, oil demand, led by transportation fuel, is projected to show solid gains throughout the remainder of the year.”
For the time being, India’s COVID-19 curve could start to plateau because the state-led lockdown technique helped in lowering the day by day circumstances, in addition to retaining the efficient replica fee under 1. But, uncertainty will stay excessive primarily associated to a doable new wave of COVID-19 or the emergence of latest variants, in addition to the tempo of vaccinations in the nation.
Moreover, excessive retail costs and the excise tax coverage add uncertainty going ahead, it stated, including oil demand development is anticipated to choose up tempo in 2H21, pushed by the low baseline and an uptick in petrol and diesel demand in transportation, building and agriculture. “India’s crude imports recovered from a five-month low in April to average 4.5 million barrels per day,” it stated.
“The vicious surge in COVID-19 cases which reached record levels in May will likely weigh on demand for crude imports for May and June, with local refiners expecting the situation to improve in July. Constrained domestic consumption could free up product for exports over the period.”