LPG consumption declines 16% in August, petrol-diesel accelerate amid erratic monsoons

India’s LPG (liquefied petroleum gas) consumption declined about 16.2% in August from a year earlier, according to provisional government data, as a growing shift toward piped natural gas (PNG) weighed on demand for cooking fuel.

Meanwhile, petrol and diesel consumption rose 7.9% and 6.5%, respectively, year-on-year (YoY) in August. The increase in diesel demand was driven by greater use of irrigation equipment amid below-normal monsoon, while higher mobility and transportation needs also supported fuel consumption.

LPG consumption declines

Consumption of LPG in August slipped to 2.424 million metric tonnes (MMT), according to provisional government data.

Speaking to The Hindu, Prashant Vashisht, Senior Vice-President at ratings agency ICRA, said persistent concerns over the availability of the bottled hydrocarbon gas coincided with a sharp rise in PNG connections, including among industrial consumers.

“Some industrial LPG consumers shifted to PNG and found the supply was reliable as [constant] availability-related issues persist for LPG,” he said, attributing the increase to a rise in industrial PNG consumers.

Data from the Petroleum and Natural Gas Regulatory Board (PNGRB) showed that PNG connections rose 36% between April and June this year to 4.61 lakh, supported by “strong growth” across the domestic, commercial and industrial segments.

Petrol, diesel consumption uptick

IIndia’s diesel consumption rose 6.5% year-on-year (YoY) to more than 7 MMT during the review period, driven primarily by increased use of diesel-powered generators and irrigation equipment by farmers and agriculturists.

Petrol consumption also increased 7.9% YoY to around 3.83 MMT, as mobility and commuting activity picked up amid below-normal rainfall. India recorded its seventh-lowest August rainfall since 2001 during the period under review.

“Rainfall in August was erratic, which increased demand for diesel-operated generators among farmers. In addition, some industries shifted to diesel after their [pre-agreed] affordable quota of natural gas was fully utilised,” Mr. Vashisht said.