India's Diesel, Gasoline Sales Pick Up in June 

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India's consumption of diesel and gasoline showed strong growth in June compared with May, with state governments easing lockdown restrictions as the country's recent wave of Covid-19 infections started to fall. However, demand could dip again. Doctors are predicting a possible third wave of the pandemic in coming weeks because people are crowding into public spaces, flouting social distancing norms and not wearing masks. Furthermore, domestic prices for diesel and gasoline are at record highs due to the run-up in crude oil prices and high taxes, which could dampen economic activity (IOD Jun.23'21). The world's third largest oil consumer saw June gasoline sales jump 29% and June diesel sales rise 18.5% versus May, according to preliminary sales data from Indian Oil, Bharat Petroleum and Hindustan Petroleum. The trio of state-owned refiners account for about 90% of India's retail fuel sales. June gasoline sales were 5.7% higher than in the same month of last year while diesel sales were 1.8% lower than in June 2020. Covid-19 Statistics Improve India saw its daily total of new Covid-19 cases dip to 49,000 by the end of June from a peak of 414,000 on May 6. Covid-19 deaths have also declined from around 5,000 on May 23 to around 1,000 at the end of June. State governments have responded to these numbers by relaxing measures that were put in place to slow the spread of the virus. Sales of jet fuel fell 4.2% in June versus May as the government slashed the capacity at which airlines were allowed to operate their planes to just 50% on Jun. 1 from the previous level of 80%. But jet fuel sales were up almost 10% versus June 2020 when airlines were allowed to operate at just one third of their capacity. "We see the opening up of several states in June and sharper progress of vaccination as positive triggers and believe there could be a very sharp revival in fuel consumption in the second half of the financial year," Probal Sen and Karan Rautela, analysts at Centrum Institutional Research, said in a recent note. "We estimate full year overall volume growth at 8.6% for the three [state-owned] companies," they added. India's financial year runs from Apr. 1 to Mar 31. Oil Minister Dharmendra Pradhan said this week that sales of petroleum products could rebound to pre-pandemic levels by December, supported by billions of dollars of government spending on economic stimulus measures (IOD Jun.29'21). Rakesh Sharma, New Delhi India's Fuel Demand ('000 b/d) Jun'21 Jun'20 %Chg. May'21 Gasoline 628 594 5.7% 470 Diesel 1,359 1,384 -1.8 1,110 LPG 865 790 9.5 787 Jet Fuel 63 57 9.9% 64 Source: State-owned refiners,

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