Monsoon Dampens Diesel Sales For Retailers In Early Sept

Diesel sales by Indian state-owned retailers saw a decline in the first half of September compared to the previous month, according to preliminary data released on Monday. The drop is attributed to reduced industrial activity and mobility caused by monsoon rains.

India, the world’s third-largest oil importer and consumer, typically experiences a dip in fuel demand during the monsoon season, which spans four months starting in June. Flooding in several regions affects transportation and economic activities.

State retailers sold 2.72 million metric tons of diesel in the first half of September, marking a 4% decrease compared to August and a 12.3% drop from the same period last year. Diesel is primarily used in trucks and commercial vehicles.

Gasoline sales, which are mainly for passenger vehicles, remained steady at 1.23 million tons, but showed a 5.1% decline from the first half of September 2023.

In addition to limiting transportation, the monsoon also curbed demand in the agricultural sector, where farmers rely on gasoil-powered generators for irrigation. Diesel consumption is closely tied to industrial output in India, Asia’s third-largest economy.

Indian Oil Corp, Hindustan Petroleum Corp Ltd, and Bharat Petroleum Corp Ltd, which account for around 90% of the country’s retail fuel outlets, sold 1.32 million tons of liquefied petroleum gas (LPG) in early September. This represents a 3.3% increase from August but a 2.9% decrease compared to last year.

Sales of aviation fuel stood at 303,600 tons, reflecting a 1.1% decline from the previous month.