India’s Covid-19 crisis has pummelled demand for transport fuels to the lowest in several months, highlighting the risks for energy consumption amid an uneven global recovery from the pandemic.
April sales of gasoline — used in cars and motorcycles — fell to 2.14 million tons to the lowest since August, according to preliminary data from officials with direct knowledge of the matter. Sales of diesel, a bellwether for economic activity, was a tad higher than February, which had two fewer days. If that’s factored in, then monthly sales of the country’s most-used fuel last month would have been the lowest since October.
Leading oil producers, including members of the OPEC+ cartel, as well as traders have been tracking the devastation across the country, which has been assailed by a record wave of coronavirus infections. Lockdowns and curfews in states and cities such as New Delhi and Mumbai have curbed mobility and stoked speculation that the nation’s refiners will cut back on crude purchases.
Despite India’s predicament, Brent gained in April as investors bet recoveries elsewhere, principally the US, China and Europe, would lift overall demand. Against that backdrop, the Organization of Petroleum Exporting Countries and its allies agreed to relax supply curbs from this month, while warning the virus wave in India and other nations may derail the recovery.
Fuels sales in India could have been worse in April but for the elections in some states that helped spur demand as thousands of people attended rallies and staff of political parties used vehicles for campaigning. But with those elections over and the virus still spreading, there could be a deeper impact in May.
India is a vital energy market. The country is the third-largest oil importer, and in 2019 — the last full year before the pandemic erupted — daily demand averaged 5.3 million barrels, according to BP Plc’s statistical review. Leading refiners typically source most cargoes from the Middle East and Nigeria.
Spokespeople for Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp., declined to comment. The three retailers account for more than 90% of the nation’s fuel sales.