The Coronavirus lockdown did affect a handful of sectors and while things are getting back to normal, it is happening at various recovery rates. And now, as per the numbers and reports in the Hindustan Times, the fuel demand in India (except ATF) has returned to the same levels as was before COVID-19. With the economy also reflating, it will help in higher consumption in the near future, as has been told by the nation’s top oil firm on Tuesday. In April last year, the fuel sales witnessed a record drop of 45.8% with the lockdown being imposed in order to stop the spreading of the virus. While the ease of those restrictions did help in recovery, the growth for petrol first, and now diesel to, has hit up as it was before COVID.
Barring ATF, fuel demands are back on track
Indian Oil Corporation (IOC) Chairman Shrikant Madhav Vaidya told that barring ATF, the fuels have touched regular demand, meaning they are back on track. The sales for petrol reached optimum level a couple of months bac, diesel was up by 7.4% in the first half of March. As for LPG, the sales went up even when the lockdown was on. However, ATF sales were subpar as airlines were operating in limited capacity.
He further spoke about the demand for ATF and feels that it will take another quarter for it to go back to normal. He also mentioned that IOC is confident about the recovery in fuel demand given the recovery in economy and he mentioned that with the vaccine rollout, one can simply hope for the best. As for the numbers, he stated that petrol demand was up by 5.3 percent to 1.05 million tonnes while demand for diesel rose to 2.84 million in the first half or March. He recalled that ATF fell by 80% post the lockdown was imposed and was down 36.5% in the first half of March. As for petrol sales, this is the first annual rise post October.
Lifting of lockdowns lead to positive growth
The economy began to recover in the fourth quarter of 2020 thereby resulting in positive growth as GDP expanded post contraction for two quarters. The expansion by 0.4% was a result of the lifting up of restrictions on the lockdown when the country saw a considerable decrease in COVID-19 cases.
OPEC’s report suggested a jump in the oil demand in India this year by a considerable 13.6% to a 4.99 million barrels per day. The demand for oil fell 10.54% in 2020 to 4.40 million bpd from 4.91 million bpd in 2019. The report stated that given the macroeconomic indicators seem positive, along with the fall in COVID-19 cases across the country, indicate a solid foundation for the demand of oil in India.
Aviation sector still poses uncertainty
Meanwhile, industries have also been improving and developments are underway, which means there will be an oil demand in 2021, also meaning a rebound by transportation fuels, among other sectors. However, the report suggests that the aviation sector will still have to see a struggle given that there is no assurity regarding the situations that lay ahead. The report suggests that though there have been improvements, the operations for flights are more than 10% lower than the levels that were recorded in 2020 in the same period.
2020 witnessed a contraction in India’s GDP by a 7 percent, however, the forecast suggests a growth by 9 percent in 2021. The report stated that given the 0.4% growth in the final quarter of 2020, India was among the few economies to have witnessed a growth and the same is likely to continue with an increase in the manufacturing activities.