NEW DELHI: India’s diesel and power consumption, considered bellwether for economic activity, contracted sharply in November as festive season demand fizzled out, indicating the economic recovery remains fragile as renewed curbs in several states hit by a second wave of Covid infections restricted movement of people and goods.
Monthly sales data of public sector fuel retailers, who dominate 90% of the market, showed diesel consumption falling 7% from a year ago in November.
On monthly basis, however, diesel grew 8% from October when consumption had shot past the pre-pandemic level for the first time in eight months. Power demand dropped 4.7% to 98.37 BU (billion units) in the same month from 93.94 BU in the year-ago period.
The drop in diesel and power demand follows data last week showing the economy shrinking 7.5% in the third quarter after slumping nearly 24% in the previous three months. Reduced fuel consumption is also telling on refinery operations, which showed a decline.
But the festivities, even though muted, pushed up petrol demand by 5% from a year ago as people preferred driving to their home towns, visit relatives or a holiday destination. Petrol consumption has been growing by about 4% for the last few months but became flat during the first fortnight.
Diesel sales had topped pre-Covid level in October by clocking a 6% year-on-year growth. Power consumption too had recorded a double-digit surge in October after turning positive in September.
Consumption of LPG, or household cooking fuel, increasing more than 4% in November on more home cooking — instead of eating out to celebrate- as families largely remained restricted to their homes. Consumption was down 2% from a year ago in the first fortnight
Jet fuel sales were down more than 48% from a year ago, recovering plenty of ground since September but still remained 48% short of the pre-Covid level as the number of flights still remain curtailed. This shows sales recovered ground as they were 52.8% lower from a year ago in the first fortnight.