India's diesel use hits 3.65 million tonnes in first half of October as crude touches $100
Diesel demand rose sharply in the first 15 days of October, putting pressure on oil companies as crude prices reached $100 a barrel worldwide.
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Crude oil prices have reached $100 a barrel across the world, and diesel demand in India has risen sharply at the same time, increasing pressure on oil companies. India consumed 3.65 million metric tonnes of diesel in the first 15 days of October. That is roughly 27 million barrels used in just 15 days.
Tension between Iran and the United States continues, while the war between Ukraine and Russia goes on. This is creating problems over crude oil supply in the market. The sharp rise in domestic demand is a difficulty for the government and oil companies, and the risk of inflation is also growing.
According to the figures, diesel sales by state-run fuel companies in the first fortnight of October reached 3.65 million metric tonnes (about 27 million barrels). This is about 26.4% higher than the same period in September and 25.4% higher than a year ago.
Several reasons have been given for the sudden rise in demand. Demand has risen considerably in the festival season, putting a strain on logistics and transport. Truck sales rose 33.57% in September compared with August, which indicates that more diesel vehicles are on the roads. Electricity demand has also risen, and it is being met with diesel-run generators as backup.
This is also the farming season. Kharif crops are harvested and rabi sowing takes place in October. As a result, diesel consumption for tractors and pump sets on farms rises considerably.
S. P. Singh, senior fellow at the Indian Foundation of Transport Research and Training, said, "Diesel consumption is rising because of growing demand from the farm sector, and transport movement has also picked up during the festival days."
Meanwhile, state-run oil companies are selling fuel to retail customers at below market prices. This is causing a large loss of about Rs 20 on every litre of diesel.
Will petrol and diesel prices rise? According to estimates by Petroleum Ministry officials and rating agencies, fuel prices could rise further in the next few days. The crisis in West Asia is costing state-run oil companies crores of rupees every day. So if crude prices in the international market stay around $110 for a long time, petrol and diesel prices in the domestic market could rise right after the festivals.
