India's gasoline and gasoil sales jumped sharply in May compared with April, in a recovery from historic lows after a partial easing of the lockdown imposed to curb the coronavirus pandemic, provisional sales data showed on Monday.
But industry analysts expect a full-scale recovery to pre-COVID-19 consumption levels in India to be months away as the monsoon season approaches while manufacturing activities remain low and transportation demand takes a hit in some parts of the country.
State-retailers' gasoline sales in May rose by about 83% from April to about 1.6 million tonnes. Sales of gasoil, which accounts for about two-fifths of the country's overall fuel sales, rose by about 69% in May compared with April to 4.8 million tonnes, provisional sales data from state fuel retailers showed.
However, gasoline and gasoil sales in May are still down by about 36% and 31% respectively from a year earlier, after contracting more than 50% in April year on year.
State companies Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum own about 90% of the retail fuel outlets in India.
The sources who provided the provisional industry data asked not to be identified citing confidentiality.
Sales of liquefied petroleum gas (LPG) rose 13% in May from a year ago while jet fuel declined by 85% during the same period.
"April likely marked the nadir with diesel demand slumping by more than 50% y-o-y," said Emma Richards, senior oil & gas analyst at Fitch Solutions.
Fitch expects India's 2020 diesel demand to decline by 14% from a year ago, and sees a full-scale recovery in fuel demand in 2021-2022.
The June-September monsoon season and Covid-19 related disruptions will cap India's oil consumption in the third quarter, Richards said.
FGE Energy analyst Senthil Kumaran said India's gasoline consumption could return to pre-COVID level by October but gasoil demand would recover only towards the end of the fourth quarter of this year.
"Manufacturing will be the key basis for a spur in gasoil demand but we don't see that picking up to the full level until end of this year," Kumaran said.
Gasoil demand will contract by 8% in July-December versus the same period a year ago and then grow 7.7% in first quarter of 2021, he said.
FGE expects India's overall fuel demand to grow by 3% in the first quarter of 2021 from a year ago.