Even as India’s economy starts to revive after the unlock phase, the fuel demand may take two to three quarters to rebound to normal levels as several states impose lockdown to curb the spread of coronavirus. Fuel sales, which fell by a record 45.8 per cent in April, were expected to recover to the pre-COVID levels after the restrictions were lifted. However, with several states imposing lockdown to curb the record daily infection rates, it may take 6 to 9 months to return to normalcy, PTI reported citing Indian Oil Corp (IOC) Director-Finance S K Gupta.
Lockdowns in various states are taking a toll on the demand numbers and one thing is sure that we are not going back to the normal times at least in the near future, S K Gupta added. Right after the month of April when travelling was strictly prohibited, the fuel sales made a smart recovery in May but they dipped again from the second half of June.
While the economy was gauged to be mending with the increase in fuel demand, the fall after a gradual recovery has come as a setback. Diesel sales at India’s three biggest fuel retailers fell 13 per cent in July from the previous month and were down 21 per cent on-year, according to provisional PSU sales data. Diesel, which accounts for two-fifths of the overall petroleum product demand in India, fell to 4.85 million tonne in July. Similarly, the petrol sales fell 1 per cent to 2.03 million tonne in July from June, and by about 11.5 per cent from a year ago.
Last week, IOC Chairman Shrikant Madhav Vaidya had stated that demand would begin to rebound only by year-end. Meanwhile, S K Gupta further said that a capital spending of Rs 26,233 crore is planned in fiscal year 2020-21 and out of this, around Rs 4,200 crore is planned to be spent on refinery upgrades and pipelines, Rs 5,000 crore on marketing infrastructure, Rs 2,200 crore on petrochemical projects, and Rs 5,000 crore on group companies.