Omicron curbs dampen motor fuel demand in January

Sales of petrol and diesel in the first half of January dipped by 3% and 5%, respectively, from a year ago, as Omicron brought back work-from-home and several travel restrictions.

Compared with the first fortnight of January 2020, petrol sales, which had recovered quickly from the first and second waves of the Covid-19 pandemic, were still 6% higher, as per the sales data from state-run oil companies that control about 90% of petrol pumps in the country. Diesel sales, however, were 8% lower than in January 2020.

Jet fuel consumption grew by 7% from a year earlier though it was 38% lower compared with the January of 2020. Continuing curbs on international travel have never allowed the aviation industry to go anywhere near the pre-Covid normal in the past two years.

Sales of LPG, used mainly for cooking in India, has remained robust, rising 9.5% year-on-year and 15% from two years ago.

Falling transportation fuel demand, however, hasn’t had any impact on refinery run yet but inventory is building up, an executive at a state-run firm said.

If the demand continues to fall through the month, refiners may have to cut runs and alter their crude sourcing plans, the executive said.

The SARS-CoV-2 Omicron variant has proved very infectious but so far less fatal across the world compared with the previous variants. Several state governments have imposed weekend curfew and shut shops and offices to stem the pace of infection. Several offices have again asked employees to work from home. All these steps have reduced the demand for transportation fuels.


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