Fuel demand jumps 11% to 184 million tonne in FY16

India’s fuel demand jumped 11% in 2015-16, the fastest pace in two decades, as petrol and diesel

sales soared on expanding economy and manufacturing activity.

Fuel consumption rose 10.9% to 183.5 million tonne in the financial year ended March 31, from

165.5 MT in the previous year, according to latest data released by the Oil Ministry. Diesel sales

soared 7.5% to 74.6 MT. Petrol consumption was up 14.5% to 21.8 MT, its highest level in two

decades as automobile sales grew at their fastest pace in five years on narrowing price

differential between petrol and diesel.

“Petrol consumption has been unprecedented and has surpassed our expectations,” said A K

Sharma, Director (Finance), Indian Oil Corp (IOC), the nation’s biggest fuel retailer.

“Narrowing price difference between petrol and diesel has led to people preferring petrol driven

vehicles.” A litre of petrol in Delhi costs Rs 61.87 in Delhi while diesel is priced at Rs 49.31 per

lire. The difference previously used to be about Rs 20 per litre.

Also, petrol is taxed more than diesel. Fuel sales jumped 16.5% in March on back of robust

petrol and diesel sales and oil companies stocking dealers with supplies to meet year-end targets.

Fuel consumption jumped 16.42% to 17.09 MT in March from 14.67 MT a year ago, according

to the data.

Diesel demand was up 15% at 6.78 MT, while petrol sales soared 21% to 2.04 MT. Sharma said

fuel consumption is likely to remain robust in 2016-17 with petrol demand projected to rise by

about 11% and diesel by close to 4%.

Also contributing to the rise in fuel sales is expanding economy and manufacturing as also the

agriculture sector demand for diesel. Kerosene demand fell to 6.82 MT from in 2015-16 from

7.02 MT in the previous year as government moved to replace use of heavily subsidised kerosene

with LPG.

LPG sales were up 8.6% to 19.5 MT. Naphtha consumption was 20.9% higher at 13.4 MT. ATF

or jet fuel consumption was up 8.7% to 6.22 MT in 2015-16, indicating robust growth in air

traffic.

NGS INDIA