New Delhi: The month of September will be remembered for three simultaneous records in India’s fuel sector. Diesel consumption growth during the month peaked at a four year-high of 20% and petrol usage grew at a two year-high rate of 25% while, at the same time, Liquefied Petroleum Gas (LPG) consumption grew at a dismal rate of 4.1%, lowest in two years.
The record growth in diesel consumption of 20%, a level not seen since April 2011 as per government’s records, was led by lower prices, higher use of agricultural pump sets due to poor monsoon and a jump in the commercial vehicle sales. The low LPG usage was primarily due to implementation of Direct Benefit Transfer in LPG (DBTL) which has cut down pilferage of subsidised cylinders which account for over 80% of total cooking gas sales.
“The deficient monsoon led to use of diesel by Diesel Generator (DG) sets for irrigation in agriculture. A prospective reduction in price from 1 September 2015 also pushed August sales to September,” the oil ministry’s technical arm Petroleum Planning and Analysis Cell (PPAC) said in its latest study.
Cumulative rainfall in the country during the monsoon season between June and September stood at 760.6 millimeter, 14% below the Long Period Average of 887.5 millimeter. September alone recorded a drop of 24% in rainfall. While rainfall activity was less than normal in all the four regions, maximum drop of 17% was observed in North-West followed by 16% in Central India.
A rise in the demand for logistics and transportation services pushed the growth of medium and heavy commercial vehicle sales to a record 35% during September.
Port traffic and cargo handled at the country’s 12 major ports grew 4.1% in the April-September period driven by 42% growth in finished fertiliser and 18% growth in thermal coal shipments. High diesel usage growth in September was also recorded due to the low base of 0.2% growth in the same month last year.
The consumption of petrol, the other automobile fuel, also set a record by growing at 25%, the highest rate since May 2013 when petrol usage had grown by 31%.
“The high growth in petrol consumption may be attributed to higher usage of cars and two wheelers due to eased prices of petrol and consumer preference for petrol-driven vehicles,” PPAC said, adding the onset of festive season, a bad monsoon and the slow progress in rapid transport systems also contributed to high petrol usage.
Thanks to the slump in the global crude oil prices since June last year, the retail selling price of petrol has come down by 15% to Rs 61 per liter currently from Rs 72 per liter in April 2014. Similarly, diesel prices have been slashed by oil marketing companies by 20% to Rs 44 per liter during the same period.
The trend in the consumption of cooking gas last month followed an opposed trajectory than the two auto fuels. “LPG consumption growth of 4.1% was registered in September 2015. The rate of growth during this month is the lowest in last two years,” PPAC said.
Subsidised LPG consumption grew by a mere 2.5% last month while the growth of non-subsidised cylinders touched a high of 40%. The DBTL scheme has curbed the diversion of subsidised cylinders to commercial establishments.
The DBTL scheme, also known as PAHAL, was rolled out across the country by the government in January this year. Under the scheme, cooking gas subsidy is directly transferred into the beneficiary bank accounts leading to plugging of leakages.
At the end of Marche 2015, the scheme has eliminated 33.4 million fake or duplicate consumers of the total 181.9 million registered LPG users leading to annual subsidy savings of Rs 14,672 crore based on the quota of 12 cylinders per consumer and the average LPG subsidy of Rs 336 per cylinder for the year 2014-15.
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