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Despite Skyrocketing Prices, India's Fuel Demand May Hit Record High to Make up For Covid Slump

Representative Image

Representative Image

The demand is likely to shoot up by 10 % from the current year.

India’s demand for gasoline diesel and other fuels is likely to reach a record 215.24 million tons in the next one year, according to Ministry of Petroleum and Natural Gas’s arm, Petroleum Planning and Analysis Cell.

The demand is likely to shoot up by 10 % from the current year, which has been hit hard by the Covid-19 pandemic.

India’s fuel consumption last year plunged by as much as 70 per cent, led by the world’s biggest lockdown.

India is the third highest oil importer and strong demand for transport and industrial fuels is expected to drive next year’s rebound. Consumption of diesel, an economic barometer and the country’s most-used fuel, will grow by more than 13 per cent, as will demand for gasoline. Overall fuel demand in the current financial year is expected to fall 8.5 per cent.

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A trend for more commuters to use personal cars, instead of buses, trains and other modes of public transport, is expected to drive India’s demand for gasoline.

Demand for aviation fuel, which suffered the biggest blow, is estimated to grow more than 74 per cent during 2021-22, but will remain a little lower than the pre-pandemic year, the PPAC’s projection showed.

India’s GDP in the third quarter of FY21 rose marginally at 0.4 percent, in line with expectations, reaffirming that the economy had managed to exit the Coronavirus pandemic-led slump by 2020-end, according to official data released by the National Statistical Office (NSO) on Friday.

Petrol and diesel prices continue have been soaring due to continuous rise in fuel rates. Union Petroleum and Natural Gas and Steel Minister Dharmendra Pradhan last month blamed the hike on reduced production by the international market.

“There are two main reasons behind the fuel price rise. The international market has reduced fuel production and manufacturing countries are producing less fuel to gain more profit. This is making the consumer countries suffer,” Pradhan was quoted as saying by news agency ANI.

“We have continuously been urging the Organisation of the Petroleum Exporting Countries (OPEC) and OPEC plus countries that it should not happen. We hope there will be a change,” he said.

first published:March 03, 2021, 12:55 IST