- What is happening in the country?
- Sudden increase in demand for diesel!
- As much as 36.5 lakh tonnes of fuel consumed in 15 days
India Diesel Demand : Global crude oil prices have reached $100. Meanwhile, the rapid increase in diesel demand in the country has increased the pressure on oil companies. It is worth noting that India consumed 3.65 million metric tonnes of diesel in the first 15 days of October. This means, in just 15 days, the country has consumed as much as 27 million barrels of diesel. On the one hand, tensions between Iran and the US continue, while on the other hand, a war has erupted between Ukraine and Russia, creating problems for the supply of crude oil in the market. In addition, rapid growth in domestic demand has created a crisis for the government and oil companies, raising the risk of future inflation. (India Diesel Demand)
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Why did the demand for diesel suddenly increase so much?
During the festive season, there is a significant increase in demand in the country, which puts a strain on the logistics and transport system. Truck sales increased by 33.57% in September compared to August. This shows that the number of diesel vehicles on the roads has increased. This has also increased the demand for electricity, which is being met through the use of diesel-powered generators as backup. Moreover, it is the farming season. Kharif crops are harvested and Rabi crops are sown in the month of October. This significantly increases the consumption of diesel for farm tractors and pumpsets.
Losses to oil companies
According to the data, diesel sales by state-owned fuel companies rose to 3.65 million metric tons (about 27 million barrels) in the first fortnight of October, up 26.4% from the same period in September and 25.4% from a year earlier.
According to Reuters, Senior Fellow of the Indian Foundation of Transport Research and Training S. P. “Diesel consumption is on the rise due to increased demand in the agricultural sector and festive days have also accelerated traffic movement,” said Singh. Meanwhile, state-owned oil companies are selling fuel to retail customers at below-market prices, leading to huge losses of around Rs 20 per diesel.
Will petrol and diesel prices go up?
Fuel prices may become more expensive in the coming days, according to petroleum ministry officials and rating agencies. Due to the crisis in West Asia, the state-owned oil companies are losing billions of rupees every day. So, if international crude oil prices remain around $110 for a prolonged period, petrol and diesel prices in the domestic market may rise immediately after the festive season.
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