Petrol, Diesel Sales Soar On Erratic Monsoon Rains, LPG Demand Shifts To Piped Gas

Petrol and diesel sales by India's three state-run fuel retailers surged in August as erratic monsoon rainfall boosted fuel demand from farmers and motorists, preliminary industry sales data showed on Tuesday.

Petrol sales by Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) soared 9.1% to 3.48 million tonnes in August, compared with 3.19 million tonnes in the corresponding period a year ago.

The surge in August follows a 9.7% year-on-year growth in July.

The August volume was also 14% higher than 3.05 million tonnes sold during August 2024 and 30.7% above the level recorded in the same period of 2023.

Month-on-month, petrol sales were up by almost a percentage to 3.45 million tonnes.

Diesel sales, a key indicator of economic activity in India, rose 10.2% year-on-year to 6.27 million tonnes in August from 5.69 million tonnes a year earlier.

August is the second month in a row of double digit growth in diesel demand. Sales were up 10.7% in July.

Diesel is India's most widely used fuel, powering freight transport, agricultural machinery and irrigation. Erratic monsoon rainfall boosted irrigation demand during the peak sowing season.

The volume sold in August was 9.7% higher than in the corresponding period of 2024 and 6.3% above the August 2023 consumption. On a month-on-month basis, diesel sales however fell 12% from 7.13 million tonnes in July.

Fuel sales typically moderate with the onset of the monsoon, which reduces demand for running agricultural irrigation pumps as well as slows vehicular movement. But this year, the monsoon rains arrived late, which led to farmers using diesel to run pumps to irrigate farms.

Jet fuel (ATF) sales rose by 5.6% to 677,100 tonnes during August -- volumes that were 5.9% more than the consumption of 639,700 tonnes in August 2024 and 17.7% more than 575,400 tonnes in August 2023.

Month-on-month, the consumption was up 1.3% from 668,500 tonnes in July.

Liquefied petroleum gas (LPG) sales continued to fall, dropping 16.1% to 2.42 million tonnes. LPG demand had fallen 17.4% in July.

Industry officials said this was largely because some volumes have shifted to piped natural gas since the West Asia crisis.

LPG sales have been declining since the onset of the West Asia crisis disrupted supplies, leading to the imposition of consumption restrictions in sectors like hotels and restaurants.

The curbs were lifted in June, when sales saw an 8.6% increase to 2.18 million tonnes but were lower year-on-year as some industrial and commercial users are now using piped natural gas for their needs, they said.

The August LPG consumption was 12.6% lower than 2.77 million tonnes of August 2024 and 0.3% lower than 2.43 million tonnes of August 2023. Month-on-month LPG sales were up 2.2% to 2.37 million tonnes, the data showed.