New Delhi: India’s overall petroleum demand in 2020 fell for the first time in more than two decades as the Covid-19 pandemic shuttered businesses and factories, crimping the appetite of one of the world’s biggest consumers.
Demand for total petroleum products — including diesel, gasoline and jet fuel — slid 10.8% from a year earlier, the first annual contraction in data going back to 1999, according to Bloomberg calculations of provisional figures published by the oil ministry’s Petroleum Planning & Analysis Cell. Consumption was also at a five-year low of 193.4 million tons.
Fuel demand from Asia’s second-biggest oil importer collapsed by as much as 70% after it embarked on one of the world’s most stringent lockdowns in March. The drop resulted in a sharp cutback in crude processing and operations at petrochemical plants.
The strict restrictions ravaged the Indian economy, which is set for its biggest contraction in annual gross domestic product in records going back to 1952. Prime Minister Narendra Modi’s government has relaxed most of the virus curbs to pull Asia’s third-biggest economy out of the slump.
Demand is picking up as restrictions are eased. While monthly consumption of petroleum fuels in December was about 1.8% lower than a year earlier, it was still at an 11-month high, according to the government data.
Gasoline consumption last month rose 9.3% year-on-year, the highest since May 2019, on increased use of personal vehicles. Diesel demand was 2.8% lower than a year earlier.