India’s fuel demand jumps by 13%, rates increased for 26th time in 46 days

With India still trying to overcome the second wave of COVID-19, state-run oil companies have raised fuel prices for the 26^th time in 46 days. Petrol has become costlier by 27 paise per litre and diesel by 28 paise.

As such, both petrol and diesel rates have crossed the Rs 100 mark in several cities as highest fuel rates are recorded in Rajasthan’s Ganganagar, where petrol is sold at Rs 108.07 per litre and diesel at Rs 100.82 a litre. Reports highlight that Mumbai, the financial capital, has the highest fuel rates among metros where petrol is currently sold at Rs 103.08 per litre in Mumbai and diesel at Rs 95.14 per litre.

The unidirectional upward movement since May 4 had petrol breaching the Rs 100 mark in various cities across the country, notedly in Maharashtra, Rajasthan, Madhya Pradesh, Andhra Pradesh, Karnataka, Telangana and Ladakh.

Moreover, India’s fuel demand jumped by 13% in the first two weeks of June alone. This was a first monthly rise since March, suggesting that the worst impact of the second wave of coronavirus peaked and consumption is rebounding. According to Bloomberg estimates, road transportation fuel sales are still off last year’s levels at this time. Analysts believe that recovering demand in India is giving hope to the oil bulls and OPEC, that the third-biggest crude oil importer in the world will start to see growing consumption of oil going forward.

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As a contrast, a few weeks ago, oil demand in India was clouding the outlook of global crude consumption since the severe second COVID-19 wave resurged in March. Analysts said India’s uneven and stalled recovery was the key source of concern about global oil demand recovery. This was because of the unknowns about when localized lockdowns to fight the spread of COVID-19 infections would end and lift fuel demand for transportation and economic activities.