Fuel demand weakens in January, indicates slow economic recovery

New Delhi: India’s fuel demand faltered in January as festive and holiday season demands evaporated, indicating economic recovery still remains shaky. But Shrikant Madhav Vaidya, chairman of the country’s largest oil refiner and fuel retailer IndianOil, expects demand to exceed pre-Covid levels by March.
Latest sales data of the public sector fuel retailers, which have 90% market share, show diesel sales dropping 4% and petrol 2.3% in January from a month earlier, when consumption had posted gains of 1.8% and 1.4%, respectively.
But compared to January 2020, diesel consumption, a bellwether for economic activity, stood just 1.4% short of the year-ago period. Petrol consumption was 7.5% higher than in January 2020. This is lower than December when sales were 8.7% higher than the year-ago period.
Jet fuel sales in January improved by 1.2% over December as the government further eased flight restrictions. But sales were still 57% lower than in January 2020.