Demand for petroleum products in the country declined by 11 per cent in the first two weeks of March, due to the impact of several industries including air and road transport due to coronavirus. According to official figures, in March 2019, 19.5 million tonnes of petroleum products were sold in the country. Assuming that sales remained almost equal in the two weeks (15 days) of March 2019, it means that in the first two weeks of March 2019, about one crore tonnes of petroleum products were sold in the country. The country’s largest oil marketing company Indian Oil Corporation (IOC) said in a statement that coronaviruses had a negative impact on the sale of petroleum products. In the first week of March 2020, their sales fell by 10–11 per cent.
Demand reduced due to restrictions, travel advisory and industrial sluggishness
Demand for petroleum products has declined due to restrictions, travel advisory and industrial lethargy. Diesel sales fell by over 13 per cent on a year-on-year basis. Aircraft fuel sales declined by more than 10 percent. Petrol sales have fallen by more than 2 percent. The IOC said that sales of bunker fuel (petroleum fuel used in water vessels) have also fallen by about 10 per cent.
6–8% of crude consumption goes to aviation sector
Rating agency Crisil said demand was already lacking. Now the demand for Coronavirus has further reduced. Of the total crude oil consumption in the country, 6-8 per cent goes to Airline Industries. Various countries are banning international and domestic travel. This may cause sales to fall further. If the virus infection cannot be stopped in the next 2-3 months, the situation may worsen. Crisil said that in the next business year 2020-21, the growth rate of consumption of petroleum products may be reduced to 2-3 per cent. Meanwhile, veteran investment bank Morgan Stanley has slashed India’s fuel demand estimates by 5 per cent for the coming business year.
The government had given estimates of increasing sales of petroleum products
The Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum said before the outbreak of the corona virus that the demand for petroleum fuel could rise to 22.28 million tonnes in 2020-21 from 216 million tonnes in 2019-20. . PPAC had said that during this period, the sale of aircraft fuel could increase from 81.9 lakh tonne to 87 lakh tonne. Similarly, the demand for diesel may increase from 8.43 million tonnes to 8.65 million tonnes. The demand for petrol was expected to increase from 31 million tonnes to 34.34 million tonnes.
Petroleum products sales at 19.76 million tonnes in first 11 months of 2019-20
In the first 11 months of 2019-20 (April 2019 to February 2020), petroleum products sales were 19.76 million tonnes. Of this, aircraft fuel sales accounted for 7.5 million tonnes. Diesel sales were 7.7 million tonnes. Petrol sales were 27.8 million tonnes.