Diesel demand falls 7.4% in October partly due to economic slowdown

New Delhi: Domestic demand for diesel fell 7.4% in October from a year ago, marking its biggest monthly fall in about three years. Analysts attributed the dip in part to sluggish economic activity during the festive season. Total demand for oil during the month was down by 1.4% from October of 2018.

Demand for diesel, which accounts for about 40% of the country’s oil requirement, appears to be crumbling due to a mix of economic slowdown, extended monsoon, sluggish vehicle sales, preference for petrol vehicles, increased availability of power, electrification of railways, and GST-induced efficiency in transport, according to analysts. The fuel’s demand had contracted 3.3% in September but had grown 1.1% in the six months to September.