Petrol, diesel demand to pick up as govt relaxes lockdown rules

PTI

Business, Market

Government has allowed trucks to ply as well as farmers and industries in rural areas to resume operations after April 20

Petrol, diesel demand to pick up as govt allows some industries to resume ops. (PTI Photo)

New Delhi: Petrol and diesel consumption, which saw its biggest ever decline in the aftermath of a nationwide lockdown, is likely to pick up in the second half of the month as the government has allowed trucks to ply as well as farmers and industries in rural areas to resume operations after April 20.

Petrol and diesel sales had fallen by over 66 per cent and aviation turbine fuel (ATF) consumption collapsed by 90 per cent as the unprecedented nationwide lockdown shut factories, stopped road and rail transportation and suspended flights.

"The government has allowed inter and intra-state movement of goods traffic by road as well as rail. Also, farming operations, as well as industries outside municipal limits, have also been allowed to operate from April 20. All these will involve fuel consumption," a top industry official said.

Trucks are the biggest user of diesel. Diesel is also used as fuel in the harvester and other agri equipment. Some goods train also run on diesel.

Also, vehicles used by e-commerce operators will be allowed to ply. These vehicles would largely use petrol.

"There isn't much hope for ATF but petrol and diesel demand certainly will look up if all the industries and activities permitted by the government resume operations from April 20," the official said.

The government hasn't yet allowed resumption of domestic and international flights.

Also, road construction and resuming on work on projects in industrial clusters has been allowed, which too would consume fuel, he said.

As part of a plan to exit the world's biggest lockdown and revive stalled economic activity, the government on Wednesday allowed makers of information technology hardware, farmers and industries in rural areas to resume operations after April 20.

From April 20, the government will lift restrictions on e-commerce companies, goods movement by roads and restart port and air cargo operations.

The official said both public and private sector oil refineries had cut down their run-rate following the drop in demand.

The country's petroleum product consumption fell 17.79 per cent to 16.08 million tonnes in March.

Diesel, the most consumed fuel in the country, saw demand contract by 24.23 per cent to 5.65 million tonnes. This is the biggest fall in diesel consumption the country has recorded as most trucks went off-road and railways stopped plying trains.

Petrol sales dropped 16.37 per cent to 2.15 million tonnes in March as the 21-day nationwide lockdown enforced to prevent the spread of COVID-19 took most cars and two-wheelers off the road.

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