India's fuel demand expected to grow 5.5% next fiscal; consumption estimated to rise to 214.5 mn tn

India's fuel demand is likely to grow 5.5 per cent in the fiscal year beginning April 1 as economic activity picks up after devastation caused by the pandemic, government estimates showed on Tuesday.

Fuel consumption in 2022-23 is estimated to rise to 214.5 million tonnes from 203.2 million tonnes expected sales in the current fiscal year ending March 2022, according to the oil ministry's Petroleum Planning and Analysis Cell (PPAC).

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It will cross the pre-pandemic level sales in the current fiscal. In 2019-20, India had consumed 214.1 million tonnes of petroleum products such as petrol, diesel and LPG.

Demand for petroleum products grew by 4.9 per cent in the first nine months of the current fiscal year that began in April 2021. Fuel consumption was 148.3 million tonnes in April-December 2021.

India consumed 194.3 million tonnes of petroleum produced in 2020-21 - the year that saw a pandemic-related lockdown crippling economy and mobility.

During the next fiscal 2022-23, petrol, used mainly in cars and two-wheelers, is expected to rise by 7.8 per cent to 33.3 million tonnes.

Sales of diesel, the most used fuel, is slated to grow by 3.9 per cent to 79.3 million tonnes, according to PPAC.

Consumption of aviation fuel (ATF) is projected to increase by 49 per cent to 7.6 million tonnes. This is however less than the pre-pandemic level of 8 million tonnes.

Cooking gas LPG, whose consumption had risen even during the pandemic year due to free cylinders distributed by the government to the poor to tied over hardships of lockdown, is projected to see a 4.5 per cent growth in demand to 29.6 million tonnes in 2022-23.

While kerosene sales is seen flat at 1.5 million tonnes, naphtha consumption is projected to rise by 3.3 per cent to 15 million tonnes.

Petcoke, a better-burning alternative to coal, is likely to see a demand growth of 2.8 per cent to 14.8 million tonnes while bitumen - used in road construction - is projected to see sale rising by 1.8 per cent to 7.9 million tonnes.

Demand for petcoke has fallen over the years - from a peak of 25.7 million tonnes in 2017-18 to 21.7 million tonnes in pre-pandemic year 2019-20 and 15.6 million tonnes in 2020-21.

However, bitumen consumption, which reflects industrial activity, has been on the rise.

Naphtha consumption is expected to be above the pre-pandemic level in the current fiscal.