Huge Rise In Coronavirus Cases Hit India’s April Fuel Demand
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Indian state refiners’ local fuel sales in April declined due to state-level restrictions aimed at stemming a rampant second wave of coronavirus infections, preliminary data shows. The deadly second wave topped 400,000 new daily cases for the first time on Saturday.
Authorities reported 401,993 new cases in the previous 24 hours, the highest daily count globally, after 10 consecutive days over 300,000. Deaths from COVID-19 jumped by 3,523, taking the total toll in India to 211,853.
“Overall fuel demand is down by about 7% from pre-covid level of April 2019,” said A.K. Singh, head of marketing at refiner Bharat Petroleum Corp.
“We were near pre-covid level in March but new restrictions and covid wave-2 has temporarily reduced demand equivalent to about 10% of March demand for both personal mobility and industrial goods movement,” Singh told Reuters.
He said the local fuel consumption will ‘start to look up’ in June, by when second wave of coronavirus is expected to weaken.
Analysts are expecting India’s demand for transportation fuels to witness a sharper slump in May due to more impending restrictions.
Declining fuel sales will reduce crude intake by refiners. The country’s top refiner Indian Oil Corp is operating refineries at an average 95% capacity.
State companies – IOC, Hindustan Petroleum Corp and BPCL – own about 90% of India’s retail fuel outlets.
State retailers’ fuel sales in April declined from their sales in March and April 2019 levels, while posting a sharp rise from the year ago month when there was a nation-wide lockdown.
Questions & Answers
Q.Why did India's local fuel sales decline in April?
Why did India's local fuel sales decline in April?
Local fuel sales declined in April due to state-level restrictions implemented to control a severe second wave of coronavirus infections. This led to reduced demand for both personal mobility and industrial goods movement across the country.
Q.How much did overall fuel demand fall compared to pre-pandemic levels?
How much did overall fuel demand fall compared to pre-pandemic levels?
Overall fuel demand in April was down by about 7% compared to the pre-COVID level of April 2019. It also saw a temporary reduction equivalent to about 10% of March demand, according to a marketing head.
Q.When is local fuel consumption expected to recover?
When is local fuel consumption expected to recover?
A.K. Singh, head of marketing at Bharat Petroleum Corp, expects local fuel consumption to start recovering in June. This aligns with the anticipation that the second wave of coronavirus infections will weaken by then.
Q.What impact will declining fuel sales have on crude intake by refiners?
What impact will declining fuel sales have on crude intake by refiners?
Declining fuel sales are expected to result in a reduction of crude intake by refiners. Despite this, the country's top refiner, Indian Oil Corp, is currently operating its refineries at an average of 95% capacity.
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