High petrol, diesel prices, infections erode India's fuel demand recovery

Gasoline sales last month fell 2% from a year earlier, according to people familiar with preliminary data from the country’s three biggest retailers

By Debjit Chakraborty

Sales of fuel in India, used by millions for personal transport, faltered as high pump prices and a still rising infection count weighed on demand.

Fuel sales last month fell 2% from a year earlier, according to people familiar with preliminary data from the country’s three biggest retailers. This is the first decline since August.

While fuel had staged a healthy rebound as more commuters opt for personal cars over public transport like buses and trains, a fresh wave of infections are prompting some people to continue working from home, and leading others to reduce social interactions and leisure activities.

Read | Finance Ministry considers cutting taxes on petrol, diesel

Record pump prices are also adding to lower sales as people turn judicious spenders amid job losses and salary cuts as the pandemic and strict restrictions ravaged the Indian economy.

The sale of diesel -- the country’s most-used fuel and a proxy for economic health -- dropped 8.6% in February from a year earlier, according to the people. Liquefied petroleum gas was the only fuel that saw a year-on-year rise, with use of the cooking fuel surging 7.6% from the same month in 2020.