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India's diesel demand in August falls to a 10-month low

New Delhi: A broad decline in automobile sales coupled with excess rainfall and floods in some parts of the country may have finally caught up with diesel demand in India, which fell to its lowest level in 10 months to 6,116 Thousand Metric Tonne (TMT) in August, data published by the oil ministry’s statistical arm Petroleum Planning and Analysis Cell (PPAC) showed.

Demand for the fuel in August 2019 declined 1.13 percent to 6,116 TMT.

“Diesel demand fell 1.1 percent year-on-year for the first time since Nov 2018 and may remain sluggish. Industrial production is soft as are foreign trade and port traffic with poor freight economics unlikely to lift CV sales too even if GST falls,” research and equity firm Jefferies said in a note.

While India’s overall petroleum consumption during the month increased 2.78 percent to 17,044 TMT, the consumption recorded in the month was the lowest in the last eight months, historical data analyzed by ETEnergyWorld showed. The fall in automobile sales seems to have not impacted the country’s demand for petrol, which registered growth for two years in a row. Petrol demand in August rose 9 percent to 2,574 TMT.

The demand for Liquefied Petroleum Gas (LPG) increased 13 percent to 2,396 TMT in the month, primarily due to an aggressive roll-out by Oil Marketing Companies to achieve the target of rolling out 8 crore LPG connections under Pradhan Mantri Ujjwala Yojana (PMUY).

Demand for Aviation Turbine Fuel (ATF) declined marginally to 681 TMT in August as compared to 686 TMT recorded in the corresponding month last year.

Data also showed demand for pet coke in August increased 3.77 percent to 1,786 TMT.