India’s consumption of petroleum fuels up nearly 5% in November

With a sharp recovery in diesel consumption of petroleum fuels in India rose nearly 5 per cent in November, helped by falling price and a steady rupee.

According to oil ministry data, fuel consumption increased by 4.9 per cent to 13.9 million tonnes from 13.3 million tonnes in November 2013. Sales of diesel, the main fuel for transporters, farmers and construction companies, increased 3 per cent to over 6 million tonnes in November after falling in two preceding months.

Consumers used 3.88 million tonnes (3.7 per cent) more fuels, totalling 108 million tonnes.

The increase in diesel consumption is being seen as an early indication of an economy picking up on the back of low oil prices and resultant drop in the inflation rate. A pick-up in construction and infrastructure projects, one of the key diesel consuming sectors, is seen usually around October-November.

Pump prices of petrol and diesel had been declining almost without a break as global crude started retreating in June, declining about 46 per cent since then.

According to commentators, this spell could, however, be broken after benchmark oil Brent global crude increased 1.3 per cent to $60.25 a barrel yesterday in the wake of an attack on a Libyan oil storage facility that sparked fears of disruption.

Brent crude, a pricing benchmark for over half of the world's oil, was trading around $60 per barrel.

LPG consumption increased 14.5 per cent to 1.57 million tonnes in November and by 10.4 per cent to 11.6 million tonnes in first eight months of current fiscal that started in April.

With domestic output stagnant at 3.1 million tonnes, Indian imports were up 3 per cent in November at 15 million tonnes. In value terms, however, the imports cost $8.8 billion, down from $11.2 billion in November 2013.

India's oil import bill for 2013-14 fiscal came in at $142.9 billion, while imports in the first eight months cost $89.3 billion, down from 95.4 billion in April-November 2013.

Crude oil imports this fiscal has been down slightly at 125.7 million tonnes as against 126.9 million tonnes a year ago.