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In light of the Covid-19 pandemic and the subsequent lock down, India's fuel demand has fallen by 50 percent during the first half the current month. Demand is expected to decrease some more, considering the lock down has been extended until 3 May.
Daily operations of the country have been hampered as a result of the lock down, and fuel retailers have recorded a massive drop in demand for mechanical fuel. Dealers say that they have witnessed a 50 per cent decrease in demand during April, as compared to the same period last year.
Indian Oil Corporation, Hindustan Petroleum Corporation, and Bharat Petroleum, the three largest players in the Oil & Petroleum Industry said that sales declined by 61 per cent over the first 15 days of April, compared to the same period last year.
Two other companies that choose to stay anonymous said that fuel sales were down 64 percent, and that aviation fuel sales were down 94 percent.
According to a recent report released by the International Energy Agency, demand for crude oil is expected to grow by 5.4 per cent during 2020, and had witnessed a 2.4 per cent increase in demand during March this year. The body however pointed out that demand for petrol will decline by 9 per cent, and diesel by 6.1 per cent.
Demand is expected to increase once the Aviation Industry starts domestic and international operations that are expected to resume during May and June respectively. However, there is uncertainty.
The only fuel that the country is using heavily at the moment is (LPG) Liquefied Petroleum Gas. Sales for LPG has gone up 21 per cent as compared to consumption over the last couple of months.
Sales is set to increase as the Indian Government has announced that it would provide free LPG cylinders to the poor and the underprivileged over the next three months, starting April.
The Government has allowed for LPG production to begin starting 21 April in light of the increasing demand, and with the hope of restarting the economy. This is expected to be a difficult task considering the lock down has been extended until 3 May.
Thoughts About The Decrease In Fuel Demand Across The Country
A decrease in demand for fuel was expected considering a majority of people are confined to their homes, and that most movement is restricted to their localities. It is impossible to speculate how much demand will go up by once the lock down is lifted, and once life returns to normal.